Phoenix Holdings Ltd., a leading Israel-based financial, insurance, and investment group (TLV:PHOE) (“Phoenix,” the “Group,” or the “Company”), today reported its results for the third quarter of 2023.

Highlights

  • Total comprehensive income in the third quarter of 2023 amounted to NIS 217 million, reflecting 8.9% ROE; total comprehensive income in the first nine months of the year amounted to NIS 515 million, reflecting 6.9% ROE
  • Core income from the insurance, asset management, distribution and credit businesses (net of special items, interest and capital market effects, excluding 3% real interest rate) amounted to NIS 305 million, reflecting a core ROE of 12.7%, and NIS 955 million, reflecting a core ROE of 12.6% in the third quarter of 2023 and the first nine months of 2023, respectively
  • Non-operating income, including the decline in capital markets, interest rate changes and special items, totaled negative NIS 88 million and NIS 440 million in the third quarter of 2023 and in the first nine months of 2023, respectively
  • The conflict in Gaza has not materially impacted group results to date
  • Phoenix Holdings has substantial financial resilience and liquidity and Phoenix Insurance maintains a high solvency ratio of 205% as of June 30, 2023; in addition, in October 2023 the Company raised NIS 350 million through an expansion of bond series
  • Total assets under management as of September 30, 2023 grew to NIS 426 billion, including organic growth in addition to growth from the acquisitions of assets from Psagot and Epsilon earlier this year
  • In line with its growth strategy in the credit business, The Phoenix successfully completed a full tender offer for Gama
  • The Group continues to review potential strategic acquisitions and to invest in organizational, administrative and technological infrastructure for the benefit of its clients

Eyal Ben Simon, CEO of Phoenix Holdings:

“During these challenging times, the Phoenix pays respects to the memory of the fallen, and prays for the speedy recovery of the wounded and the swift and safe return of abducted and missing persons. The Israeli people and society have been able to harness their courage and kindness, volunteering and showing mutual responsibility that inspires us with hope and the confidence in a better future.

Since October 7, the Phoenix has acted to ensure business continuity and customer service, while providing aid and support to Israeli society. This stems from the deep understanding that the Israeli financial sector plays a substantial role in the nation’s resilience and economic stability. I am proud of the dedication of Phoenix’s employees who are volunteering while ensuring operational and service continuity for our clients.

The Group has decided to partner with the Barzilai Medical Center, which has treated hundreds of wounded people while being hit by rocket fire. Phoenix made direct donations and facilitated donations from organizations and people around the world for immediate and urgent needs. The Group will continue to assist the hospital going forward. Moreover, the Group established a dedicated fund totaling NIS 10 million to provide additional coverage to policyholders who are victims of the conflict.

The Phoenix has substantial financial resilience and a robust business position. After a thorough review of our exposures, we do not expect the conflict will have a material effect on our business activities. Despite the short-term high volatility in the Israeli capital markets, the impact on the Group’s core activities has been limited. In the insurance business, the Company's exposures are low, both due to adequate reinsurance for life insurance and long-term savings and due to government compensation for P&C damages from the conflict.

Amid the current backdrop, we continue to work toward the Group’s strategic goals. The results for the third quarter of 2023 reflect the continued improvement in core income across the Group’s activities and the continued execution of our growth strategy in the insurance, asset management, distribution, and credit businesses. As for the negative effect of market volatility, past experience has shown that Israeli capital markets are quick to recover from geopolitical events. We believe the market is resilient and expect an initial recovery that may be characterized by continued volatility.

During the third quarter of 2023, assets under management continued to grow, reaching NIS 426 billion. In addition, Phoenix successfully completed a tender offer for all shares of Gama, and we intend to continue to grow our credit activity and further strengthen our business and competitive position in this line of business.

I am proud of the Phoenix’s contribution to Israeli society, and I would like to thank the Group's clients, employees, business partners, and members of its board of directors for our joint work. Moreover, I would also like to wish the people of Israel better days."

Below are financial statement highlights for the third quarter of 2023 and the first nine months of 2023:

Comprehensive income attributable to shareholders -

The comprehensive income attributable to shareholders in the third quarter of 2023 amounted to NIS 217 million, reflecting a return on equity of 8.9%. This compares with NIS 62 million in the third quarter of 2022. In the first nine months of 2023, the comprehensive income attributable to shareholders amounted to NIS 515 million, reflecting a return on equity of 6.9%, compared with NIS 599 million in the first nine months of 2022. The reduction in income in the first nine months of 2023 is mainly due to non-operating effects, including from a lower margin between the higher interest rate and capital market effects.

Core Income from activities (net of special items, interest and capital market effects, excluding 3% real interest rates)

Core income from activities in the third quarter of 2023 amounted to NIS 305 million, which reflects a 12.7% core (normalized) return on equity. This compares with NIS 279 million in the third quarter of 2022.

Core income from activities increased and amounted in the first nine months of 2023 to a total of NIS 955 million, reflecting a 12.6% core (normalized) return on equity, compared to NIS 857 million in the first nine months of 2022.

The non-operating negative effect on the comprehensive income was NIS 88 million in the third quarter and NIS 440 million in the first nine months of 2023.

Equity capital and assets under management

Shareholders equity

The equity attributable to Company’s shareholders amounted to NIS 10.0 billion as of September 30, 2023.

Assets under management

Assets under management by the Group grew in the third quarter of 2023, reaching NIS 426 billion as of September 30, 2023.

Below is a summary of financial results of the Group's operating segments:

For more details regarding the changes in the financial results, see the Report of the Board of Directors on the State of the Corporation's Affairs and the Analyst Presentation.

P&C insurance

The comprehensive income before tax for the third quarter of 2023 amounted to NIS 87 million, compared to a comprehensive income of NIS 50 million before tax in the third quarter of 2022. The comprehensive income before tax for the first nine months of 2023 amounted to NIS 260 million, compared to a comprehensive loss of NIS 184 million before tax in the first nine months of 2023.

Health insurance

The comprehensive income before tax for the third quarter of 2023 amounted to NIS 222 million, compared to a comprehensive income of NIS 105 million before tax in the third quarter of 2022. The comprehensive income before tax for the first nine months of 2023 amounted to NIS 295 million, compared to a comprehensive income of NIS 948 million before tax in the first nine months of 2022.

Life insurance and savings

The comprehensive income before tax for the third quarter of 2023 amounted to NIS 46 million, compared to a comprehensive income of NIS 18 million before tax in the third quarter of 2022. The comprehensive loss before tax for the first nine months of 2023 amounted to NIS 37 million, compared to a comprehensive income of NIS 496 million before tax in the first nine months of 2022. It should also be noted that as of the report's publication date, the deficit in the variable management fees amounted to NIS 590 million.

Pension and provident funds

The comprehensive income before tax for the third quarter of 2023 amounted to NIS 4 million, compared to a comprehensive income of NIS 14 million before tax in the third quarter of 2022. The comprehensive income before tax for the first nine months of 2023 amounted to NIS 64 million, compared to a comprehensive income of NIS 73 million before tax in the first nine months of 2022.

Investment services (includes primarily Phoenix Investment House, formerly Excellence)

The comprehensive income before tax for the third quarter of 2023 amounted to NIS 65 million, compared to a comprehensive income of NIS 35 million before tax in the third quarter of 2022. The comprehensive income before tax for the first nine months of 2023 amounted to NIS 176 million, compared to a comprehensive income of NIS 182 million before tax in the first nine months of 2022.

Agencies

The comprehensive income before tax for the third quarter of 2023 amounted to NIS 86 million, compared to a comprehensive income of NIS 64 million before tax in the third quarter of 2022. The comprehensive income before tax for the first nine months of 2023 amounted to NIS 241 million, compared to a comprehensive income of NIS 231 million before tax in the first nine months of 2022.

Credit (includes Gama)

The comprehensive income before tax for the third quarter of 2023 amounted to NIS 22 million, compared to a comprehensive income of NIS 24 million before tax in the third quarter of 2022. The comprehensive income before tax for the first nine months of 2023 amounted to NIS 77 million, compared to a comprehensive income of NIS 48 million before tax in the first nine months of 2022.

Conference Call Information
Phoenix Holdings will hold a conference call on Wednesday, November 29, 2023 at 1pm local time in Hebrew and at 5pm local time / 3pm UK / 10am ET in English, and has published dial-in details and the presentation through the Tel Aviv Stock Exchange website.

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. The Phoenix serves a significant portion of Israeli households with a broad set of activities and solutions across businesses and client segments. Managing over $100 billion in assets, the Phoenix accesses Israel’s vibrant and innovative economic activity through a robust investment portfolio, creating value for both clients and shareholders.