Manif hits the brakes on real estate loans: "We are in a storm, there is no need to distribute money by force"

Manif is hitting the brakes in light of the stagnation in the real estate market. In an investor call held today after the publication of the reports, the CEO of the non-bank credit company, Maor Duek, updated that in recent quarters the company has been tightening its credit portfolio and is hardly distributing new credit.

According to Duek:

"We are in a perfect storm. In a sector that suffers both from an anomaly in the form of a decrease in demand and from high competition. We need to navigate the boat in stormy waters. Manif has managed to control the situation well so far. We understand that we don't need to distribute money by force, but that we need to make money. Therefore, even if it comes at the expense of growth, we are tightening our underwriting model and the handling of the portfolio. The company's management has made a conscious decision not to run forward. We are riding the horse, the horse is not riding us."

In accordance with Duek's words, the rate of increase in Manif's credit portfolio, which reached almost 5 billion shekels, has also decreased significantly. In the third quarter of 2025, Manif's credit portfolio increased by 248 million shekels, in the last quarter of last year the addition decreased to about 241 million shekels, in the first quarter of the current year the pace dropped further, to about 230 million shekels, and in the second quarter of the year, that is, the last reported quarter, the addition was cut to only about 43 million shekels. That is, Manif's credit portfolio increased by only about 1% in the second quarter of the year, compared to an increase of about 6% in the previous quarter.

The slowdown in the rate of increase in the company's credit portfolio has not yet materially affected the results. Profit totaled 51 million shekels for the quarter, an increase of 19% compared to 43 million shekels in the previous quarter. The company's revenues totaled 129 million shekels, similar to the revenues recorded in the corresponding quarter.

"This difficult situation should be resolved at some stage. Our working assumption and hope is that the industry will recover in the coming quarters. We do need to prepare the infrastructure for this. We think we will know how to identify when there will be a change of direction," said Duek.

Manif has credit lines totaling 2.7 billion shekels: 1.4 billion shekels from banks, about a billion shekels originating from bonds, and about 300 million shekels from Clal Insurance. During the first half of the year, the repayment dates for 18% of the credit distributed by the company were changed. Manif's management attributes this to the lengthening of schedules in projects against the background of market conditions, and claims that the extensions of the period are part of its risk management model and not a sign of an increase in credit failures.

The company collected 524 million shekels from customers, of which 113 million shekels were through new financing provided to developers as part of new agreements. Manif notes that some of the balances that have not yet been repaid are expected to be repaid during the year, but their repayment date is uncertain due to overdue debts, repayment proceedings, and projects that may require an extension of the period.

According to Manif, "The balance that has not been repaid consists of balances that are mainly expected to be repaid during the year, however, it is difficult to predict the exact repayment date for them, such as financing of overdue debts, financing that is in repayment proceedings that are expected to mature during the year, and projects that will require an extension of the period in light of the state of the real estate market."

In the investor call, Duek explained that "this is a normal course of business. We perform an assessment throughout the progress of the project. We are supposed to receive a high-quality checkpoint where we perform the checks for the credit and underwriting for the transaction. This is a first-rate management tool. The market does not always understand it, but we will not give it up. In many cases, the assessment regarding the project is done automatically. When we are not satisfied with the risk level, we will ask the borrower to improve collateral or repay part of the credit."

The fear of Manif's high exposure to the residential market dragged the company's stock down by almost 13% since the beginning of the year, compared to the TA Finance index, which includes Manif's stock, which rose by about 13% in the same period. The company is traded at a value of about 1.3 billion shekels. The controlling owners are Mivtach Shamir, which holds about 49%, and Clal Insurance, which holds about 9.7%.

"Everyone always offers reasons why real estate is good or not good, builds all kinds of theories and adapts the ideology to the tragedy. But if we ignore the noise, to my understanding and from my experience, the main thing that affects real estate is the interest rate. I would say that 50% of the movement in the industry comes from the level of the interest rate, another 30% is the mood, and the remaining 20% are all kinds of other reasons that they start to describe and explain. I have always said over the years that as long as the interest rate is low, real estate will run."

According to Duek, "One must understand that the interest rate and the mood are the two main things, and we don't really control the mood. Without getting into politics, an election event always reshuffles the cards and there are always people who look to be more optimistic before or after elections, and I hope that we will indeed see positive developments in this matter as well. But the issue of the interest rate, and I will say this a bit carelessly, is the key. A further reduction of the interest rate by 0.25% or 0.5% may become an incentive for apartment buyers and investors to return to the market, especially against the background of the sharp increase recorded in the last year in rent."

"If we look back, it took several quarters until the interest rate hike started to affect the housing market. Therefore, if history repeats itself, and it usually does repeat itself, and if the other conditions also work out, we think that towards the end of the year we will start to see more signs of recovery. One must, of course, say things carefully, because we are in the State of Israel and the interest rate is not the only factor, but it is usually the central factor."

"In the last month we are already seeing first signs: suddenly a developer says 'I sold an apartment here, I sold two apartments here, I sold five apartments here'. I think these signs should appear more and more. Don't be confused - there are no vacant apartments in the State of Israel. If there was no need for housing, rent prices would not rise in such a way. People need apartments, they just prefer to rent at the moment and not buy because of the interest rate, because of their expectations and because they don't have enough confidence."