Cal profits decreased in the fourth quarter of 2023 by 36% to NIS 26 million

The war of iron swords that started at the beginning of the fourth quarter gave its signals on the results of the credit card companies. The company's profits decreased in the fourth quarter of 2023 by 36% compared to the corresponding quarter and amounted to NIS 26 million.
Despite a weak end to the year following the war, the year 2023 actually ends with record profits, with Kaal earning NIS 450 million, a 45% increase compared to 2022. The results were also affected by one-time profits, primarily from the sale of Beit Kaal. Excluding non-recurring items, the company's profit last year was NIS 277 million, a decrease of 3.2% compared to 2022.
In the fourth quarter, the war affected the results of the company, under the management of Levy Halevi, in two key areas: the use of credit cards and provisions for credit losses.
First, there was a 1.9% decrease in credit card turnover to 38 billion shekels, this is considered an unusual figure, since the company often has high growth rates that also reach a double-digit rate.
However, at the beginning of the war, there was a sharp drop in consumption in the economy, which manifested itself in a drop in the use of credit cards and began to recover in December, towards the end of the fourth quarter.
The stagnation in economic activity at the beginning of the war was also expressed in the demand for loans. The company's data shows that the company's credit portfolio (consumer and business credit) decreased by 1.1% during the fourth quarter to NIS 9.1 billion. At the same time, since the beginning of the year, the company sees a recovery in demand and ticket activity in Israel and abroad.
In addition, the provisions for credit losses in the company stood at NIS 98 million in the fourth quarter, an increase of 127% compared to the corresponding quarter. The sharp increase was due to an increase in group provisions (general provisions, which do not result from a specific failure of a borrower) and this is mainly due to the uncertainty arising from the war.
In addition, Cal froze debt collection operations in the first weeks of the war, which forced him to increase provisions for the debts.
In an annual summary, the company's total credit card transaction turnover grew by 8.8% last year to NIS 163 billion, and the company's total active cards grew by 4.1% last year to 3.47 million cards. Despite the drop in demand in the fourth quarter, the company ends the past year with a 10% growth in its credit portfolio, with consumer credit already reaching NIS 7.74 billion.
Cal is in a period of uncertainty as far as the controlling owner of the company is concerned. It is currently under the control of Discount Bank, which is obliged by law to sell the company in less than two years. At the same time, following the war, Discount asked the Ministry of Finance for an extension of another year in the sale process.