Israel's three credit card companies continue to function as the banks' cash cows. The credit card companies' aggregate net profit rose 8.8% to NIS 566 million in 2009 from NIS 520 million in 2008, the companies' financial reports show.
Aggregate revenue rose 6.2% to NIS 3.54 billion in 2009 from NIS 3.33 billion in 2008.
Israel's credit card companies are Isracard Ltd., wholly owned by Bank Hapoalim (TASE: POLI); Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa), owned by Israel Discount Bank (TASE: DSCT) (71.2%) and First International Bank of Israel (TASE: FTIN1;FTIN5) (28.8%); and Leumi Card Ltd., owned by Bank Leumi (TASE: LUMI) (80%) and Azrieli Group (20%).
Credit card use continued to grow during 2009. Aggregate purchases by credit card (excluding cash withdrawals from ATMs) totaled NIS 168 billion, 4.8% more than in 2008.
Isracard CEO Dov Kotler said, "Growth rose from quarter to quarter. Fourth quarter turnover rose by 13%."
Isracard is the largest credit card company, with a transaction turnover of NIS 81.5 billion in 2009, compared with NIS 77.6 billion in 2008. Its market share of 48.6% is slowly growing. Net profit rose to NIS 179 million in 2009 from NIS 176 million in 2008. Revenue rose to NIS 1.56 billion in 2009 from NIS 1.51 billion in 2008.
ICC-Cal had the highest profit for the third consecutive year. Despite a series of scandals in the second half of last year over clearing violations for online transaction, which resulted in large fines by Visa Inc. (NYSE: V) and MasterCard Inc. (NYSE: MA) and the ouster of the head of a subsidiary and of CEO Boaz Chechik last month, ICC posted a net profit of NIS 249 million in 2009, 15.8% more than in 2008. Revenue rose to NIS 1.16 billion in 2009 from NIS 1.03 billion in 2008. Transaction turnover rose 4% to NIS 42.9 billion in 2009.
Leumi Card, run by CEO Dan Cohen, consolidated its position as the second largest credit company in terms of turnover. Transaction turnover rose 5%, the highest of the three companies, to NIS 43.4 billion in 2009. Net profit rose to NIS 138 million in 2009 from NIS 129 million in 2008, and revenue rose to NIS 820 million from NIS 789 million.
Published by Globes [online], Israel business news - www.globes-online.com - on March 3, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010