Gamma Company
Gamma management
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The company that provides non-bank credit and credit card services published its financial statements for the third quarter of the year on Thursday and jumped 12% that day in Tel Aviv trading. The company recorded net financing income of NIS 52.7 million, an increase of 59% compared to approximately NIS 33.1 million in the corresponding quarter.
In the third quarter, Gamma recorded a net profit of NIS 20.1 million, an increase of more than 2 times compared to a net profit of NIS 9.6 million in the corresponding quarter, and an increase of 80% compared to the previous quarter. The balance of the credit portfolio and guarantees (without credit card activity) increased to NIS 2 billion.
In an interview with Bizportal, speaking The chairman of the company’s board of directors, Erez Yosefabout the company’s activities, how to make money from collateral, credit losses and the future of the company.
“Gamma took and leveraged the close relationship it has had with its customers for over 20 years in order to provide all the solutions for their financing needs instead of a bank, and this is our growth strategy – to take our biggest asset (customers) and offer them our services at a much higher level More than other financial entities. Gamma’s growth is a function of the strategy it has set for itself and we are implementing it in practice. You can see this reflected in the growth of the company’s credit portfolio, both in business loans, both in credit against real estate and in the worlds of financial guarantees.” .
What exactly does it mean to give a guarantee? How do you profit from it?
“Many business activities with institutions or with other business entities are required to guarantee the service. For example, a gardening company that won a tender of a certain municipality is required to provide a guarantee that will guarantee its compliance with the win. Until today, these people would go to banks that would ask for a deposit against the guarantee they give so that they do not They would have exposure and would charge very high prices because they had no competition. Bank guarantee – as it is called.
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“Gamma’s advantages over the banks are, first of all, that we do not require him to deposit a deposit, but we underwrite this business, and if he is worthy, then he will receive a guarantee. The price of the guarantees are attractive and they know how to compete with the banks, in addition, it directs the deposit (that he deposited in the bank) to him. for reuse. This is a huge advantage for businesses. A few weeks ago we received the approval of the Accountant General of the Treasury to issue guarantees to government offices and government companies.
“The field of guarantees is at the same level of profitability as a normal loan. The great advantage of this is that there is no need to raise sources against it. Money does not pass here except in the case of failure, in which case the guarantee has to be realized and paid to the body that received the same guarantee.”
What is the reason for the increase in the last quarter?
“We have identified three growth engines, the first of which is a loan for businesses where we have decreased by 93%, the second is real estate loans for entrepreneurs, businessmen, financing for businesses that want to expand and more. The third thing is financial guarantees so that in terms of balances we have grown by 70% compared to the corresponding quarter.
“In the area of prices, we improved our profitability both because of raising a bond of 550 million shekels about six months ago and also thanks to competition with more attractive prices than the competitors, thus capturing a larger market share. Another reason is the price adjustments to the large risk.”
Why have credit losses increased?
“Credit loss expenses are divided into two: a general provision (provision rate according to a fixed model) from which most of our increase is, and the second thing is specific credit losses. Our total increase was due to the fact that we increased the credit portfolio and increased the security cushions so that we could live with it in peace. Another thing that increased the expenses of credit losses is that last year there was a re-covering of credit losses that were set aside in the year of the Corona (year 20).”
How come you didn’t make a bigger investment in real estate?
“We have a model and according to the balances, the model tells us how much to set aside. The model takes into account the security cushion. In real estate, we have a portfolio in which most of its debt is a first-class lien with completely reasonable financing rates, and overall we are satisfied with it.”
Where will you be in 3 years?
“The company has a very clear vision. The Phoenix will support everything necessary for the growth and expansion of the company, whether it’s capital or other things related to the field. We currently have a portfolio of 2 billion shekels, we’ve grown year by year by 800 million, that’s the pace we’re looking forward to and that’s also Our mission. We have a huge potential in the small business market that we need to raise and we will.”
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