Clal Insurance Enterprises (CLIS) Q2 2024 earnings summary

Executive summary

• H1 2024 net income was NIS 257m versus a NIS 80m loss; comprehensive income was NIS 323m versus NIS 55m.

• Higher insurance underwriting income and credit-card results supported earnings, while investment returns and life-insurance financial margins were weaker YoY.

• AUM rose 3.5% from December 2023 to NIS 350b; premiums, benefit contributions and investment-contract proceeds fell 3% YoY to NIS 13.0b.

Financial highlights

• H1 total income was NIS 11.870b versus NIS 11.097b; income before tax was NIS 393m versus a NIS 129m loss, and net income was NIS 257m versus a NIS 80m loss.

• Q2 total income was NIS 4.334b versus NIS 7.016b; income before tax was NIS 315m versus NIS 12m, and net income was NIS 215m versus NIS 8m.

• H1 gross premiums earned were NIS 5.321b versus NIS 5.707b; credit-card transaction income was NIS 735m versus NIS 367m, with Max consolidated from April 2023.

• H1 EPS was NIS 3.22 versus a NIS 1.07 loss; Q2 EPS was NIS 2.70 versus NIS 0.09.

• H1 tax expense included a one-off NIS 18m increase from closing prior-year assessments; Max’s effective tax rate was 28.6% versus 23.7%.

Outlook and guidance

• No earnings guidance was set; the war’s duration and full effects on economic activity, markets and borrowers’ repayment capacity remained difficult to assess.

• The Bank of Israel forecast GDP growth of 1.5% in 2024 and 4.2% in 2025, assuming fighting’s direct economic effect continued through early 2025.

• Variable management fees remained suspended until participating-policy returns recover accumulated losses; the related policyholder liability was NIS 0.5b at June 30.

• A solvency-report framework expected from December 2024 would include fair value of future variable management fees, estimated to add ~14 percentage points without Transitional Provisions and ~9 points with them.

• Long-term savings growth was supported by rising pension contributions, while executive insurance and investment-contract proceeds continued to run off.