The aggregate net profit of Israel's three credit card companies rose 14% in 2008 to a record NIS 519 million from NIS 454 million in 2007. The 2008 figure does not include NIS 121 million in one-time gains from the sale of shares in MasterCard Inc. (NYSE: MA).
The aggregate revenue of the three credit card companies rose 15.7% to NIS 3.45 billion in 2008 from NIS 2.98 billion in 2007.
The three credit card companies are wholly-owned Bank Hapoalim (TASE: POLI; LSE:80OA) subsidiary Isracard Ltd.; Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa), owned by Israel Discount Bank (TASE: DSCT), and First International Bank of Israel (TASE: FTIN1;FTIN5) with a 71.2% and 28.8% stake, respectively; and Leumi Card Ltd., owned by Bank Leumi (TASE: LUMI) and Azrieli Group, with an 80% and 20% stake, respectively.
The recession began to bite the credit card companies in the fourth quarter of last year. For example, Isracard's fourth quarter profit fell 10% compared with the corresponding quarter of 2007. Isracard chairwoman Irit Izakson said, "The effect of the global recession on the Israeli economy will probably result in a further reduction in private consumption, which will have a direct impact on the scale of credit card use."
Credit card transactions, excluding cash withdrawals from ATMs, totaled NIS 260 billion in 2008, 9.7% more than the NIS 145.6 billion in 2007. Isracard's credit card transactions totaled NIS 77 billion in 2008, a 48.3% share of the market; Leumi Card's credit card transactions totaled NIS 41.4 billion, a 25.9% share of the market; and ICC-Cal's credit card transactions totaled NIS 41.3 billion, a 25.8% share of the market.
ICC-Cal had the largest net profit in 2008, at NIS 215 million, 16.9% more than the NIS 184 million in 2007. Isracard was in second place, with a net profit of NIS 175 million in 2008, 5.4% more than the NIS 166 million in 2007. However, third place Leumi Card, with a net profit of NIS 129 million in 2008, achieved the fastest growth - its net profit was 24% higher than the NIS 104 million in 2007.
Isracard had the highest revenue in 2008, at NIS 1.54 billion, 13.8% more than the NIS 1.35 billion in 2007. ICC-Cal was in second place, with NIS 1.12 billion revenue in 2009, 18.2% more than the NIS 946 million in 2007, followed by Leumi Card, with NIS 789 million revenue in 2008, 16% more than the NIS 680 million the year before.
Published by Globes [online], Israel business news - www.globes-online.com - on March 17, 2009
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