The profits of Isracard, Leumi Card and Israel Credit Cards-Cal reached $174.3 million last year, a two percent increase from 2011. Last year, interchange fees in Israel were reduced after the Isracard law took effect, leading some experts to voice concerns about the card companies’ ability to profit. The card companies, however, were able to pull in a profit despite the regulatory changes, according to Globes.
Bank Hapoalim, a subsidiary of Isracard, posted the strongest growth—a 20 percent increase from 2011 to reach $74.3 million. If MasterCard share sales are excluded, however, the profit fell by 13 percent.
Leumi Card, which is owned by Azrieli Group and Bank Leumi, reported a profit growth of 1.7 percent to reach $48.3 million last year.
“Last year was good, which was surprising,” Leumi Card CFO Hagi Heller said, Globes reports. “The results are much better than we expected.”
ICC, which is owned by Israel Discount Bank and First International Bank of Israel, was the only company to post lower profits last year. The company’s profits fell 8.7 percent from 2011, due to a 17 percent increase in sales and marketing expenses while revenue remained flat. Profits were also affected by a six percent increase in credit losses.
Card use has expanded in Israel, and Isracard CEO Dov Kotler said that he expects credit card use to continue its expansion through the coming year.
“We see increased use of credit cards, but the growth rate has slowed from eight [to] 10 percent to five to seven percent, and the slowing growth will probably continue in 2013,” Kotler said, according to Globes. “It is important to note, however, that there is still growth.”
While Isracard controls half of the credit card market, ICC experienced the strongest growth in credit card use last year with a 8.1 percent increase. ICC’s revenue, however, increased by only 0.2 percent. As a result of more frequent card use accompanied by a reduction in interchange fees, Leumi Card’s revenue increased by 1.5 percent and Isracard’s revenue increased 3.2 percent.