Israeli nonbanking credit finance company Nawi Brothers Group (TASE: NAWI) is to submit a request to the Bank of Israel to acquire a controlling stake in the credit card company Isracard (TASE: ISCD). Last Thursday the board of directors of Nawi Brothers Group approved a request to the Bank of Israel to allow it to buy more shares in Isracard and to reach a holding that would give it the controlling core of Israel's biggest credit card company.
Nawi Brothers currently holds a 5% stake in Isracard after becoming a party of interest in the credit card company in January 2023. The company notified investors that "If approval is received from the Bank of Israel, the company's board of directors will examine increasing its holding in Isracard."
Nawi Brothers controlling shareholder Dori Nawi and chairman Shahar Oshri told "Globes," "15 months ago we were already in the process of increasing the holding," they said referring to the Isracard shares they bought for NIs 96 million in the third quarter of 2022. They added, "There is nothing new in our plans. We are perhaps the strongest in non-banking credit financing, which has proved itself and our rating is very high. Our strength is known and the equity is very high (about NIS 800 million). This is a branch that we don't have - household credit and Isracard is strong in the household sector, so we believe it will bring competition for the banking system."
Until 2019, Isracard was owned by Bank Hapoalim (TASE: POLI), which was forced to sell it after the Strum Law to increase competition and reduce concentration. The Nawi Brothers had previously considered acquiring Isracard's controlling core but the plan did not move forward but the company is once again expressing interest in acquiring control, after the Israel Competition Authority ruled out the sale of Isracard to the Harel Insurance Investments and Financial Services Ltd. (TASE: HARL).
Harel offered NIS 3.3 billion for all Isracard's shares, while Nawi Brothers is only interested in the controlling core of 30% and is hoping for Bank of Israel flexibility. Menora Mivtachim Holdings Ltd. (TASE: MMHD) has offered to buy 32% of Isracard at a company valuation of NIS 3.5 billion.
Nawi and Oshri said, "Today the Bank of Israel wants to increase competition. The Bank of Israel issued a call for concessions to non-bank entities to obtain a banking license in order to encourage competition. We spoke with the Bank of Israel last week and were very impressed by the Bank of Israel's serious team that aims to encourage competition. As of today, the policy of the Bank of Israel requires a 30% holding in order to achieve control, but we requested additional concessions following the policy to encourage competition that would allow us to acquire control. That is why we convened the board of directors to approve the request."
Published by Globes, Israel business news - en.globes.co.il - on March 3, 2024.
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