Reduction in credit losses and streamlining measures jumped direct financing profits by 50%


Despite the corona crisis and the increase in risk in consumer credit, direct financing profits jumped by 50% in the third quarter of 2020. This is reported today by the consumer credit company from the Tzur Shamir Group, issued in August 2020 and managed by Eran Wolf.

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Net income in the third quarter amounted to NIS 38.3 million, compared with NIS 25.6 million in the corresponding quarter last year. The company attributes the increase to both efficiency measures and a sharp decrease in expenses for credit losses. The company’s revenues in the quarter increased by 2.2% and amounted to NIS 146 million, compared with NIS 142.8 million in the corresponding quarter.

In the third quarter of the year, direct financing recorded a decrease in expenses for doubtful and bad debts (corresponding to provisions for credit losses), which amounted to only NIS 7.8 million, compared with NIS 19 million in the corresponding quarter. The decrease in provisions was due to the fact that the Company made the majority of provisions in previous quarters.

In addition, following an efficiency plan implemented by the company with the outbreak of the corona crisis, the amount of cost savings in the third quarter of 2020 amounted to approximately NIS 12.6 million. Total direct financing expenses decreased by 16% to NIS 66 million, compared with NIS 78 million in the corresponding quarter.

After at the beginning of the corona crisis direct financing slowed down its lending activity, in the third quarter it returned to growth. The amount of the company’s loan portfolio as of the end of September was NIS 8.6 billion, similar to the balance of the portfolio at the end of the third quarter last year.

Eran Wolf, CEO of Direct Finance, said: “The sharp increase in net profit was achieved, among other things, following the efficiency measures we took with the outbreak of the crisis and a decrease in credit damage compared to the corresponding quarter last year. Efficiency measures encompassed all areas of the company’s operations and included, among other things, technological and process improvements. The low credit losses in the quarter reflect a significant decrease in credit failures and an increase in the loan recovery rate as a result of the actions we took to reduce the risk, including conservative underwriting, and reducing exposure to unsecured loans. ”

Eran Wolf is the CEO of Direct Finance Photo: Tommy Harpaz


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