Ron Fainero, CEO of Max (photo by Benny Gamzo to Tova)
Just before the huge deal between Clal Insurance and Warburg Pincus (the controlling owner of the Max AdShrai card company) the company reports the financial results for the fourth quarter of this year and for the whole of 2022. The data shows that MAX continues to grow and the profitability is also satisfactory, which makes the objections to the purchase of the company irrelevant.
The company’s data shows that the annual net profit amounted to NIS 248 million, compared to NIS 118 million in 2021, while the profit in the fourth quarter was NIS 65 million compared to a loss of NIS 17 million in 2021, a loss that resulted from a one-time provision. The profit reflects a return on capital of 16.2%, compared to a return of 8.3% in the corresponding period last year.
More in-
The company’s revenues in 2022 amounted to approximately 1.8 billion shekels, a growth of approximately 29%, while revenues in the fourth quarter grew by approximately 30% and amounted to approximately 489 million shekels. The company’s expenses in 2022 amounted to approximately NIS 1.4 billion, an increase of approximately 19%, while expenses in the fourth quarter of 2022 amounted to NIS 403 million compared to NIS 398 million in the corresponding period last year.
MAX stated that the increase in expenses is due to direct expenses related to the increase in business activity. The expenses in 2022 include an increase in the provision for VAT assessment, regarding overseas activity. The scope of expenses for credit losses in the portfolio remains low despite the dramatic increase in the portfolio.
The number of active credit cards at the end of 2022 stood at approximately 2.7 million, an 11% growth compared to the end of 2021, when the number of active Max (non-bank) cards grew by approximately 24% and reached 1.14 million.
The company’s issuance turnover amounted to approximately NIS 113.3 billion, a growth of over 18%, while the issuance turnover of Max cards grew by approximately 34%. In the fourth quarter, the issuance turnover increased by about 10% compared to the turnover in the corresponding quarter last year, of which about 26% in Max cards.
The balance of the consumer credit portfolio (private customers) amounted to approximately NIS 8.5 billion at the end of the year, a growth of approximately 34% compared to the balance at the end of 2021. The company’s data shows that during the year it lowered its margins for households, while a margin of 5.6% in 2021 is dropped to 5.45%.
The balance of the business credit portfolio amounted to NIS 800 million at the end of the year, an increase of almost 70% compared to business credit volumes in 2021.
CEO of Max, Ron Fainero: “The results we are publishing today represent the hard work of the last few years, in which we acted consistently in accordance with a clear strategic plan that supported the expansion of our customer base and the construction of the largest credit portfolio in the industry in order to promote competition.
“In the last three years, we have managed to triple the net profit, double the number of Max customers and increase the total credit portfolio by 55%, from NIS 6 to 9.3 billion! We have turned from a bank credit card company into a leading and growing finance company that offers the best credit cards In Israel, competitive credit for banks and insurance and savings products. In 2022, we grew by approximately 24% in the volume of active Max cards and by approximately 34% in the volume of their cycles. Our consumer and business credit portfolios grew by approximately 37% respectively to become a significant and competitive player for banks.”
Fainro emphasized that “this year Max expanded the range of innovative services and products offered to its customers on the credit card, from refunds on purchases in Bitcoin, the option to save directly from the card, to fast foreign exchange transfers abroad. In addition, we entered the State Guarantee Fund as a body that provides credit to small businesses the new and we made available to businesses an independent guarantee on better terms than the bank.
“I am happy about the re-election of the Ministry of Defense and the Histadrut Workers’ Union at Max, to renew the agreements with us for the major club cards “Bah Tsedade” and “Together for You”, and even to launch a new and unique airline ticket for Histadrut employees, following the success of our airline ticket, SKYMAX.”
He also noted that “we analyze the effects of the macroeconomic changes in the economy, especially the effects of the Bank of Israel interest rate increase on households and businesses, and make adjustments for the benefit of our customers. In 2022, the write-off rate for credit losses remains stable and lower than the rate in recent years, thanks to the advanced credit underwriting models ours and the responsible risk management policy we adhere to.”
Chairman of Max and representative of the Warburg Pincus investment fund, Yaron Bloch: “The last few years at Max have been characterized by the implementation of an ambitious and focused growth strategy in which the company cultivates the direct relationship with a variety of its customers through leading value propositions and an advanced digital, service and support system, all while emphasizing on diversifying its sources of income.
“These days, Warburg Pincus and its partners are working to complete the particularly complex process of selling the Max group to all holdings, one of the leading financial groups in Israel. The apparent merger will allow Max to strengthen its competitive position in the Israeli financial market, and offer its customers a wider variety of competitive value propositions.”
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