Shaul Navi no holds barred: It’s not every day you hear the controlling owner and chairman of a public company express himself in a free and unfiltered manner regarding the issues of the day. But that’s exactly what happened this week when Shaul Navi, the chairman of the off-bank credit company Yaakov Finance and its controlling owner (59.4 %), held an investor call on the occasion of the publication of the company’s reports – which he founded after parting with his brother, Dori Naoi, the controlling owner of Naoi Brothers – for the year 2022.
Naoi referred to the collapse of two companies in the industry – Younet Credit, whose board of directors was headed by Moshe Kahlon, the former Minister of Finance, for a certain period of time; and backing holdings, which was under the control of the underwriter Yonatan Cohen.
According to Naoi, the off-bank credit market is “a very difficult and very problematic market. Think of a fire in Lag BaOmer. Those who enter this market and do not understand enough, will burn out and leave. He will lose the money – the company’s money, the employees’ money and his own money. Backing Holdings and Yount Credit reached insolvency. If we sit down and analyze what happened to these companies, then it seems that first and foremost those who managed them were people who did not understand this market at all and do not know it. They entered public companies or bought stock exchange skeletons, and started managing the companies. They have a lack of managerial ability, a lack of financial ability and a lack of knowledge of how to stand up to the banking system. Those chosen to run these companies are simply frauds. Scammers and thieves. And it is very difficult to find crooks in a certain period of time.”
Navi also criticized the rush to grant credit to the real estate industry and credit to households. “Everyone in our market went and gave endless credit to the real estate industry. I do not encumber real estate. Because the State of Israel does not suit long weddings. I only work on a short contract and without a lien. If I have to exercise the lien to repay the debt, and it does not return from the flow, then I have failed in the transaction. This should be clear to everyone. Others went and gave money without knowing if there was an ability to repay. Real estate takes time. In my previous company, it took us three years to realize a lot in Givatayim. And it was still a consensual exercise. Without agreement it would have taken five years.”
Regarding credit for households, Navi said that he sees it as a great danger. “This is a very big danger. You will say that it is dispersion, but the amounts there today are very problematic. I look at the credit card companies, who gave credit to households endlessly (and their combined portfolio has already crossed the NIS 20 billion mark – AA), And I don’t know how this credit will come back. I think there will be a crisis here.”
Naoi predicts that the entrepreneurial real estate companies and the contractors will enter into a crisis soon, against the background of the increase in interest rates which makes it very difficult for the companies both in terms of financing and in terms of sales, since the interest rate makes it difficult for the public to buy apartments through mortgages. According to Naoi, “Everyone knows the state of the housing market. Everyone knows that a contractor who a year ago sold eight apartments a week, today hardly sells an apartment a week. The picture is very clear. What should be added to it? The housing market is slowing down. The banks went a little crazy. They gave 100% financing for the purchase of land. Bank Leumi CEO Hanan Friedman and Bank Hapoalim CEO Dov Kotler are good CEOs, but the banks wanted too much too quickly. And that will be corrected. Now the banks are already asking for 25% equity. The contractors will digest it.”
From the reports of Jacob Finance It appears that her credit portfolio at the end of 2022 stood at NIS 1.53 billion, an increase of about 10% compared to the end of 2021, when the credit portfolio stood at NIS 1.39 billion. Net financing revenues more than doubled, from a level of NIS 37 million in 2021 to a level of NIS 76.8 million in 2022. The net profit also jumped almost twice, at a rate of 95%, from NIS 24.3 million in 2021 to NIS 47.5 million in 2022.
Yaakov Finance was established at the end of 2020 and was issued in March 2022 at a value of NIS 440 million, while raising NIS 88 million from the public, so it began trading at a value of NIS 528 million. Since then the stock has fallen by about 50% and the company’s market value today stands at NIS 272 million.