CAL reports reveal: This is the compensation received for the frequent flyer club
The credit card company's net profit rose by approximately 4% to 104 million shekels, excluding the one-time payment received from El Al for transferring the FlyCard club to Isracard, which stood at 23 million shekels in the second quarter. In total, the overall compensation CAL expects to receive for the termination of the engagement with El Al stands at 75 million shekels.
The credit card company CAL, managed by Yafit Gariani, concluded the second quarter with revenues of approximately 843 million shekels, an increase of 6.5% compared to the same quarter last year, resulting from an increase in credit card activity and loan provision.
Net profit rose by approximately 4% to 104 million shekels, excluding an exceptional one-time provision from last year made against the backdrop of a court ruling. Without excluding one-time effects, net profit rose by 11%, as the company received a one-time payment from the airline El Al for transferring the FlyCard club to Isracard. CAL is held by Bank Discount (72%) and First International Bank (28%), and is in the midst of a sale process to the Union group of the Horesh family and Harel, which is awaiting the decision of the Competition Authority. Revenues for the half-year totaled 1.65 billion shekels, an increase of 6.6%.
The reports reveal that CAL will receive two payments from El Al regarding its engagement with Isracard and the transfer of the FlyCard frequent flyer club. Due to the early termination of the engagement, El Al will pay a refund for marketing grants received prior to the termination notice in the amount of 23 million shekels, which was credited to the second quarter results. In addition, CAL will receive royalties for the continued operation of FlyCard-type credit cards until the end of the year in the amount of 52 million shekels, to be recognized in future financial reports. In total, CAL is receiving 75 million shekels in compensation for the termination of the FlyCard engagement.
The consumer credit portfolio totaled 9.3 billion shekels, an increase of 11.9% — the ninth consecutive quarter of growth. During the half-year, the portfolio grew by approximately 400 million shekels, mainly thanks to auto credit activity, which crossed the billion-shekel threshold for the first time. The total portfolio, including commercial credit, stands at 10.9 billion shekels. Simultaneously, expenses for credit losses rose to 60 million shekels in the quarter, compared to 50 million shekels last year — an increase of approximately 21%, which the company attributes mainly to the growth in the portfolio.
Changes at the top of CAL
On the business side, the launch of the FlyAll tourism club in cooperation with Issta stands out, following the loss of the FlyCard club to Isracard earlier this year. The new club is intended to compete with FlyCard, and CAL reports that it has added more than 130,000 customers within two months. CAL also reported on the extension of partnerships with Bank Hapoalim, Mizrahi Tefahot, and the HiTechZone club, on new agreements with the "Tov" club of state employees and with Bituch Yashir, and on cooperation with Eldan in the field of auto credit.
The reports are published amidst a round of turnover at the top of the company. Deputy CEO and Head of the Business Clients and Partners Division, Odalia Moshe Ostrovsky, is ending her role, following the departure of Lital Wechsler, Deputy CEO and Head of the Resources and Customer Experience Division. In their place, Zoarit Yogev, former Deputy Head of the Mortgage Division at Bank Leumi, and Tony Cohen, CEO of MaccabiDent, are expected to join. CEO Gariani stated that the company is presenting "strong results" and emphasized that the billion-shekel threshold was crossed in auto credit, "all this in a challenging macro environment and under the influence of Operation 'Iron Swords'."
