Whereas some of the main competitors of Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) have announced in the past few days that they were planning to spend hundreds of millions of shekels to obtain a strategic foothold in the Israeli credit card market, Clal Insurance is wary.
“We have no plans at this time to acquire a stake in a credit card company. It was on the table, but it’s not on the agenda at the moment. Credit card companies are good companies, and naturally this would be a financial investment,” said Clal Insurance CEO Avigdor Kaplan in a critique of plans by Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) and Israel Phoenix Assurance Ltd. (TASE: PHOE1;PHOE5).
Clal Insurance posted a net profit of NIS 517 million in 2006, 14.5% less than in 2005. Excluding NIS 45 million in one-time profits made in 2005, the drop was 7.6%.
Whereas Clal Insurance’s main rival, Migdal, took advantage from its strength in the life insurance sector, posting a record profit of NIS 570 million in 2006, Clal Insurance’s financials showed diversified sources of revenue. It is not solely dependent on life insurance, but is well balanced between life insurance, which contributed 48% of total insurance profits, and elementary insurance, which contributed 52%. The company’s financial arm contributed 17.5% of consolidated net profit, overseas insurance activity contributed 3.4%, and financing activity contributed 5.4%.
“This was a very busy year compared with previous years,” said Kaplan. He cited, among other things, the acquisitions of US insurer Guard Financial Group Inc. and mutual and provident funds from Israel Discount Bank (TASE: DSCT). To help finance these deals, the company said that it would not distribute another dividend of NIS 150 million, announced last June, on its 2006 profits.
“Globes”: Are the reports that IDB Holding Corp. Ltd. (TASE:IDBH) is planning to sell part of its stake in the company having any effect on you?
Kaplan: “That’s a matter for the company’s shareholders, not a matter for Clal Insurance. I have nothing to say in the matter, beyond the announcements by IDB. These matters have no effect on activity at Clal Insurance, either on me or on the company’s other executives. All in all, it’s good for us to be part of IDB.”
Published by Globes [online], Israel business news - www.globes.co.il - on March 12, 2007
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