Credit card company Max Today (Sunday) published the financial statements for 2021, which show that it recorded a net profit of NIS 117 million last year. Excluding non-recurring provisions, the net profit was NIS 157 million, almost three times compared to NIS 47 million in 2020.
However, due to provisions that included, among other things, NIS 50 million in favor of a future success grant to Bank Leumi, which controlled the credit card company until their separation in 2019, accounting profit decreased. The grant was set as a target within the framework of the operating card issuance agreement signed at the time of the sale of the company to the Warburg Pincus Investment Fund.
As a result of the same provision, Max presented an accounting loss in the last quarter of NIS 17 million, while excluding those provisions, the profit in the fourth quarter was NIS 22 million, compared to NIS 15 million in 2020. We note that the provisions are accounting and do not affect the credit card company To Leumi in a few years and not immediately.
Max can draw encouragement from the fact that the company’s revenues in the fourth quarter increased by about 22% compared to the corresponding quarter last year, and stood at about NIS 377 million. This is mainly due to the increase in credit card turnover as a result of the opening of the economy to full activity and the removal of some of the restrictions on tourism in Israel and around the world. In 2021 as a whole, revenues amounted to NIS 1.4 billion, an increase of 15% compared to 2020.
In the past year, Max recorded a 19% increase in the balance of the consumer credit portfolio (private customers), which amounted to NIS 6.4 billion. The average interest rate on consumer credit fell last year and as of the end of the year stood at 7.2%, compared with 7.7% at the end of 2020. This is partly due to the campaign in which the bank undertook a lower interest rate of one percent than that offered by banks.
The company also recorded an increase in business credit, and the balance of the business credit portfolio amounted to NIS 493 million, an increase of 20% compared to the balance at the end of 2020. The average interest rate on business credit also decreased for the business sector and stood at 5.2% at the end of last year. Compared to 5.4% at the end of 2020.
Another growth engine for the company was an increase in the amount of credit cards, especially non-bank cards. The volume of valid cards stood at about 2.97 million at the end of 2021, an increase of about 8% compared to the same period last year, when the number of non-bank cards increased by about 10% (112,000 additional valid cards) and reached about 1.2 million, compared to an increase of 6.3 % In the number of bank cards (105 thousand additional cards).
The company’s IPO turnover at the end of the year amounted to NIS 96 billion, an increase of 21%. In the fourth quarter, the issuance turnover increased by approximately 28%, compared with a turnover in the corresponding quarter last year and in non-bank cards by approximately 45%.
In addition, after two years in which no dividend was distributed, the company’s board of directors decided to distribute a dividend of NIS 63 million in accordance with the rules set by the Supervisor of Banks.
“2021 was a year of growth alongside a corona-adjusted economic routine, a year in which Max strengthened its strategic vectors – strengthening the customer base with non-bank credit cards and building the largest and strongest credit portfolio in the industry,” said Max CEO Ron Feinero. A look at the economic routine of Israelis and we learn that in the past year the economy has strengthened and returned to almost full activity alongside the corona, except for the activity of Israelis abroad that has not yet been balanced to a level we knew before the plague. “