Isracard Group: Revenues in the third quarter of 2021 grew by 9% to NIS 585 million

Isracard Group published its financial results for the third quarter and the first nine months of 2021.
The results indicate growth in revenues both relative to the corresponding quarter last year and relative to the previous quarter, as a result of the increase in credit card activity, including in outbound tourism cycles relative to 2020.
At the same time, the company also recorded a sharp increase in net profit as a result of the sharp decrease in expenses for credit losses along with an improvement in the macroeconomic environment, which led to a reduction in the group provision for credit losses in the second and third quarters of 2021.
In addition, Isracard returned to show an increase in the balance of credit to private individuals in the third quarter of the year compared with the previous quarter.
Revenues in the third quarter of 2021 grew by 9% to NIS 585 million, compared with NIS 537 million in the corresponding quarter last year, and growth of 4% compared to NIS 565 million in the previous quarter of the year. The growth in revenues, compared to the corresponding quarter last year, is mainly attributed to high double-digit growth in revenues from credit card operations and an increase in the volume of outbound tourism turnover, although still at a significantly lower level than pre-Corona outbound tourism turnover. Revenue from credit card operations in the third quarter of 2021 grew by 16% to NIS 485 million, compared with NIS 419 million in the corresponding quarter last year. The growth was mainly due to a 14.7% increase in the turnover of credit card transactions, and an increase in revenues attributed to outbound and inbound tourism that led to an increase in commissions from foreign exchange transactions, despite a decrease in the cross-commission from 0.575% to 0.55% from the beginning of the year. Clearing fees from businesses.
Net interest income in the third quarter of 2021 amounted to NIS 109 million, compared with NIS 110 million in the corresponding quarter last year, partly as a result of the decrease in the credit balance for private individuals that began during 2020 following the Corona plague crisis. At the same time, there was an increase of about 2% in net interest income compared to the previous quarter, as a result of the increase in the balance of credit to private individuals during the third quarter of the year.
In the third quarter of 2021, there was a 79% decrease in expenses for credit losses, which amounted to NIS 12 million, compared with expenses for credit losses of NIS 57 million in the corresponding quarter last year. The sharp decrease in expenses for credit losses was mainly due to the reduction in the group provision rate in light of the improvement in macroeconomic estimates and the return of the economy to pre-Corona activity, a decrease in the credit balance for individuals and a sharp decrease of 51% to NIS 24 million. , Compared with net write-offs of NIS 49 million in the corresponding quarter last year, as a result of actions taken by the company to increase collection activity.
Bottom line, Isracard ended the third quarter of 2021 with a 62% increase in net profit to NIS 99 million, compared to NIS 61 million in the corresponding quarter last year. The sharp increase in profit, compared with the corresponding quarter last year, was mainly due to the growth in credit card operating income due to the double-digit increase in transaction turnover, a decrease in expenses for credit losses as a result of the improvement in macroeconomic estimates and a decrease in net write-offs.
The net profit in the third quarter of 2021 reflects a return on average capital (annual calculation) of about 15.6% and compared to about 10.3% in the corresponding quarter last year and about 7.4% (excluding one-time events) compared to the end of 2020