Isracard net profitin the second Q: NIS 61 million

The credit card company Isracard published its results for the third quarter, which were affected by the corona crisis and the second closure. The company, managed by Ron Wexler, concludes the third quarter of the year with a net profit of NIS 61 million, reflecting a decrease of 26.5% compared to the corresponding quarter last year.
The decline in profit is due to a decrease in the Company's credit card turnover and an increase in provisions for credit losses. The turnover of credit card transactions in the third quarter of 2020 decreased by 4.9% compared to the corresponding quarter to NIS 42.5 billion.
Isracard notes that the decline in transaction turnover in the third quarter of 2020 intensified especially during the second closure in the economy starting in the second half of September 2020. The company estimates that credit card transactions in the fourth quarter of 2020 are also expected to be lower than in the corresponding quarter.
Another thing that obscured the company's reports was an increase in expenses for credit losses that amounted to NIS 57 million in this quarter, an increase of 11% compared with the corresponding quarter. It is worth noting that a major part of the provisions are write-offs of problem debt: Net write-offs in the third quarter amounted to NIS 49 million, a jump of 81.5% compared to the corresponding quarter when the write-offs amounted to NIS 27 million.
The company also reports that along with the decrease in activity, it also reduced its expenses: operating expenses in the third quarter of 2020 decreased by about 9% and amounted to NIS 189 million, compared to operating expenses of NIS 207 million in the corresponding quarter.
The decline in operating expenses was mainly due to the decrease in credit card activity cycles, and other factors such as a decrease in payments to international organizations following the decrease in tourism.
Payments to banks in the third quarter of 2020 decreased by about 15% to about NIS 61 million, compared with about NIS 72 million in the corresponding quarter last year. The decline in payments to banks was also mainly due to a decrease in credit card turnover and a decrease in the cross-commission rate.
At the end of the month, the company's shareholders will elect new directors, from whom the new chairman will also be elected, replacing Eyal Desha, who recently announced his departure.