The insurance company Harel Harel Investments invests another NIS 63 million in the non-bank credit company
Direct Financing
-1.07%
Base:58,150
opening:58,930
High:58,930
low:57,360
change:1,248,453
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which is managed by Eran Wolf. This is a market purchase of approximately 3.5% additional shares of the company, which will raise it to a holding of 6% of the shares with a total value of NIS 103.4 million.
Harel purchased the shares at a price of NIS 593.2 per share, when the market price today was NIS 581.5 per share. Harel actually purchased the shares on February 9, but the company reported the purchase only today. The price of direct financing was NIS 586 that day in the market. Although it is apparently a purchase price that is a premium of 1.2% over the market price, it is not really a premium. Direct Finance stock has lost 24% of its value over the past 12 months. Since last August, the stock has plunged by 34%, so in practice there is no premium here.
Direct Financing trades according to a market value of NIS 1.7 billion. Its largest holders are Direct Insurance (44%), Altshuler Shaham (13%) and Nokd Fund (6.3%). Now as mentioned, Harel will also be added to the list of interested parties after it increases to a holding rate of more than 5%.
In the reports for the third quarter of 2022, Direct Financing presented a profit rate of over NIS 200 million, but the provisions for credit losses are already 3%. Direct financing provided a total credit of NIS 11.2 billion; The provision rate for credit losses has soared and the fears are that it will continue to rise if and when the economy enters a slowdown-recession.
In the third quarter, the company recorded a profit of NIS 55.4 million – a 31% increase compared to the corresponding quarter. The company’s revenues in the quarter grew by 42.3% compared to the corresponding quarter and amounted to NIS 340.8 million.
The balance of the loan portfolio that was not assigned to third parties increased to NIS 5.4 billion compared to NIS 3.9 billion at the end of 2021. The balance of the loan portfolio that the company placed and marketed amounted to NIS 11.2 billion compared to NIS 9.1 billion at the end of 2021.
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