Trea will establish a mortgage system for Leumi – the capital market

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Signed a strategic cooperation agreement with the fellow loan company (P2P) that will serve as the bank’s mortgage system. According to a statement issued by the parties, a new digital system will be established in the field of mortgages, with the aim of simplifying the bureaucracy and shortening the underwriting process, while increasing transparency to customers. The system is expected to be used by Leumi and Trea’s customers in Israel, as well as Trea’s customers outside it as well.

Leumi and Batria will have to prove that in terms of technology and interface, this will be more of a trivial service that the bank’s customers could have expected to receive as early as 2021, and that when it comes to bureaucracy, these are not empty slogans. In this context, it should be noted that according to a recent review by the Competition Authority, mortgage takers in Israel do not often seek competitive offers among banks, due in part to the cumbersome procedure and requirements of players in the arena. Banks rejected the criticism and explained the complexity of the underwriting process. Leumi has a duty to prove that at least in the new platform they will set up with Trea, things will be simpler.

Tria will soon be listed on the Tel Aviv Stock Exchange as part of its merger into

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That will be emptied of its existing activities. The deal was recently finalized when the deadline is the end of July, at the end of which the Luzon Group will hold 19% of the merged company (12% fully diluted) and Trea will hold 73%. In 2020, Trea’s revenues amounted to NIS 45 million, a decrease from NIS 55 million in 2019. At the end of December, the volume of Tria’s loan portfolio amounted to NIS 2.3 billion.

The report on the collaboration with Tria comes from Leumi after it published positive results for the last quarter of 2020 and for the entire year: Net income for the quarter amounted to NIS 890 million, compared to NIS 742 million in the corresponding quarter. -8.7% in the corresponding quarter (although the loan loss expense ratio in the fourth quarter of 2020 was 0.37%, compared to 0.22% in the fourth quarter last year). This year.

Net income in 2020 amounted to NIS 2,102 million, compared with NIS 3,522 million in the corresponding period last year. The decrease in profit is mainly due to the significant increase in expenses for credit losses, mainly in the group provision, and a decrease in non-interest financing income, which last year also included income from the sale of Leumi Card in the amount of NIS 314 million. The return on capital for 2020 amounted to 5.7%, compared with a return of 9.8% in 2019 (9.2% excluding the effect of the sale of Leumi Card last year).

The decrease in return on capital for the entire year was mainly attributed to an increase in expense for credit losses against the background of the corona crisis, which amounted to NIS 2.6 billion, compared with NIS 609 million in the corresponding period last year. Approximately 74% of the expense for credit losses was due to an increase in the group provision, against the background of the corona crisis. The expense ratio for credit losses for 2020 amounted to 0.88%, compared to 0.22% in the corresponding period last year.

“Leumi’s technology-digital strategy, which has proven itself in the last year, is done through collaborations with fintech companies,” he said. Hanan Friedman, CEO of Leumi. “Leumi intends to lead the collaborations and be the bank of finteches in order to bring innovative value and services to customers of all banks. The collaboration with Trea will strengthen our business focus in the mortgage field and allow us another leap in the rapid launch of groundbreaking products.”

Assaf Shelush, founder and CEO of Tria“We believe that this engagement will be the first swallow towards strategic cooperation aimed at leveraging and joint growth and creating significant value for customers in Israel.”