Phoenix Holdings Consolidates Credit Activities in Phoenix-Gama Platform
The transfer of Phoenix Construction Finance Ltd. from Phoenix Insurance to Phoenix-Gama creates a leading credit platform for clients with significant credit portfolios and creates and unlocks value in Group’s credit activities.
Phoenix Holdings Ltd., a leading Israel-based financial, insurance, and investment group (TLV:PHOE) (“Phoenix,” the “Group,” or the “Company”), today announced that it is consolidating its credit activities in fully-owned platform Phoenix-Gama as part of its strategy to unlock and create value through growth across its businesses.
Highlights
- The consolidation supports accelerated and responsible growth in Phoenix’s credit segment and offers the Group’s clients a compelling and extensive credit value proposition.
- The transfer of Phoenix Construction Finance Ltd. from Phoenix Insurance to Phoenix-Gama creates a leading credit platform for clients with significant credit portfolios and creates and unlocks value in Group’s credit activities.
- The consolidation strengthens the Company’s leadership position in the credit market, which is based on distinctive competitive advantages, the leading Phoenix brand, diverse capabilities and strong financial resilience, and will be reflected in comprehensive and high-quality credit solutions.
- Erez Yosef, Chairman of Phoenix-Gama, will lead the Group’s credit platform and will be appointed Chairman of Phoenix Construction Finance and Chairman of Phoenix Consumer Credit
The consolidation includes the transfer of Phoenix Construction Finance from Phoenix Insurance to Phoenix-Gama to offer an extensive value proposition to the Group’s clients and the management of a significant credit portfolio under a single specialized platform. This will allow for increased business focus and allow Phoenix-Gama to leverage economies of scale, a leading brand, strong financial resilience, and advanced credit underwriting and management capabilities. The consolidation will also maximize synergies between the Group's various credit activities, creating a platform with significant growth potential.
The credit segment is one of the Company’s four core activities, and the consolidation is the latest in a series of actions, including assuming control and then taking Gama private by completing a full tender offer for Gama, aimed at establishing a significant credit platform with strong competitive advantages. As part of the consolidation, Erez Yosef the Chairman of Phoenix-Gama, will be appointed as the chairman of the construction financing company, and also as the chairman of Phoenix’s consumer credit activities which are being launched. Phoenix’s management believes that the consolidation of credit activities in Phoenix-Gama will maximize value at the group level and will enable synergies within the group.
The transfer of Phoenix Construction Finance, led by the CEO Galit Vinder Tepper, to Phoenix-Gama, which already has a significant credit portfolio, with additional annual volume of approximately NIS 40 billion in credit card activities, cements Phoenix-Gama’s position as one of the largest companies in the Israeli credit market. In the last couple of years, Phoenix-Gama has managed to significantly improve its profitability and its other key financial metrics, more than doubling the Group’s credit and guarantees portfolio, with a double-digit increase in the number of clients, total turnover and profit.
Phoenix-Gama has a unique product range and mix with a customer base of 15,000 businesses, creating competitive advantage and managerial flexibility under changing market conditions.
Eyal Ben Simon, CEO of Phoenix Holdings: “The Phoenix’s credit activities have been a strategic growth engine for the Group, and we believe that the restructuring will accelerate growth and significantly contribute to value maximization. The concentration of most of the Phoenix’s credit activities under the management of Phoenix-Gama will enable us to maximize the potential of the Company’s existing credit activities while offering optimal credit and financing solutions to our clients. Erez Yosef has led an improvement in Phoenix-Gama’s performance, and I am confident that the consolidation of credit activities under his leadership will drive significant growth in this segment. At the same time, the transfer of construction finance activities to Phoenix-Gama will release significant capital from Phoenix Insurance, improving the insurance company’s Solvency ratio. We believe our strategy will further leverage our competitive advantages and allow us to achieve a significant market share in the credit market, strengthening our position as the leading Israeli finance and insurance group.”
Erez Yosef, Chairman of Phoenix-Gama: “The consolidation of our credit activities is an incremental strategic action to strengthen the Company’s position as a dominant force in the field of business credit. The transfer of the construction financing activities to Phoenix-Gama will allow us to increase market share and capture synergies. We expect to significantly strengthen Phoenix-Gama’s equity and grow and diversify future revenues with the potential for significant value creation in the coming years.”
Galit Vinder Tepper, CEO of Phoenix Construction Finance: “The restructuring of Phoenix’s credit activities will enable the Company to offer many additional high-quality financing solutions for residential construction projects. By addressing the needs of a wide range of clients, the Group will create new sources of financing to expand its activities while creating synergy with Phoenix-Gama’s business credit activities.”
About Phoenix Holdings
Phoenix Holdings is a leading Israel-based financial, insurance, and investment group traded on the Tel Aviv Stock Exchange (TASE: PHOE). Group activities include multi-line insurance, asset management, credit, and financial product distribution, and have demonstrated strong growth and performance across the cycle. Phoenix serves a significant portion of Israeli households with a broad set of activities and solutions across businesses and client segments. Managing over $110 billion in assets, Phoenix accesses Israel’s vibrant and innovative economic activity through a robust investment portfolio, creating value for both clients and shareholders.
About Phoenix-Gama
Phoenix-Gama is the SME financing platform of the Phoenix group, providing financing solutions and financial services to businesses for over 25 years. The company provides financial services to over 15,000 businesses in Israel across several segments, including credit card clearing and factoring, real estate financing, business loans, and guarantees. The Company was assigned an AA3 rating by Midroog and its bonds are listed on the Tel Aviv Stock Exchange.
About Phoenix Construction Finance
The Company is engaged in the financing of residential construction projects including thousands of residential units at various stages of financing and construction. The Company provides a comprehensive response to all client financing needs, including senior credit, credit for supplemental capital, and guarantees. The Company’s extensive experience includes private and public development projects as well as urban renewal.
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