Harel
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Harel Group financial report - First Half of 2010

23/08/2010

Harel Insurance and Finances Group ended the First Half of 2010 with a Net Profit Totaling about 201 Million NIS
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Harel Insurance Investments and Financial Services Group published today its financial reports for the first half of 2010:
The Net profit for the first half of 2010 totaled about 201 million NIS compared to 283 million NIS for the same period the previous year. The decrease in the net profit for the period of the report emanates mainly from the negative yields obtained in most share investment channels, for the second quarter of 2010. The total comprehensive profit of the Group for the first half of 2010, comprising the profit after tax in the report period plus other comprehensive profit, totaled about 207 million NIS compared to a total comprehensive profit of 478 million NIS for the same period the previous year.

The decrease in profit and of other comprehensive profit during the period of the report compared to the same period the previous year emanates mainly from the increase in the index during the period as well as the influence of the capital market and their yields, mainly due to the poor results of the second quarter of 2010 compared to the high positive yields for the same period the previous year.

The total premiums earned by the Harel Group for the first half of 2010 totaled about 3.8 billion NIS, an increase of about 9%.

The total premiums earned in life insurance and long term savings for the first half of 2010 totaled about 1,356 million NIS, compared to about 1,275 million NIS for the same period the previous year, an increase of about 6% compared to the same period the previous year.

When neutralizing the effect of the one-time premiums of the Bezeq withdrawers deal, there is an increase of about 8% in the premiums earned in life insurance. The profit before tax from life insurance and long term savings for the first half of 2010 totaled about 101 million NIS, compared to about 241.2 million NIS for the same period the previous year.

The decrease for the profit in the period of the report emanates mainly from the decrease in the financial gains.

The scope of assets managed by the pension funds of the Group as of June 30 2010 totaled about  9.8 billion NIS compared to about 7.3 billion NIS as of June 30 2009 an increase of about 35% and compared to the end of 2009 an increase of about 11%. The increase emanates, inter alia, from the increase in the number of active members and the increase in the allocation rate of members of the mandatory pension. The number of members in the pension funds managed by the Group as of June 30 2010 numbers about 456 thousand of which about 298 thousand are active members, an increase of about 45% in the number of active members compared to June 30 2009. The benefit fees collected by the pension funds of the Group during the period of the report totaled about 869 million NIS compared to about 650 million NIS the previous year, an increase of about 34%.

The profit before tax from the management of pension funds and operation of old pension funds reached during the period of the report about 14 million NIS compared to a profit before tax in the sum of about 6 million NIS for the same period the previous year.

The scope of assets managed by the Group's provident funds as of June 30 2010 totaled about 21.7 billion NIS compared to about 19.8 billion NIS as of June 30 2009, an increase of about 10%. Income from management fees charged from provident funds managed by the Group during the period of the report totaled about 118.6 million NIS compared to 99.3 million NIS the previous year, an increase of about 16%. The total profit before tax from management of provident funds for the first half of 2010 totaled about 34 million NIS, compared to 40 million NIS the same period the previous year.

The total sum of premiums earned in health insurance, the sector in which the Group is the leader and the largest in Israel, for the first half of 2010 totaled about 948 million NIS, compared to about 886 million NIS for the same period the previous year, an increase of about 7%. The total sum of premiums earned in the health insurance sector constitutes for the period of the report about 25% of all premiums earned by the Group.

The profit before tax from health insurance business for the first half of 2010 totaled about 97 million NIS. The comprehensive profit in the health insurance sector for the period of the report totaled about 103 million NIS.
The gross premiums in the general insurance for the first half of 2010 totaled about 1,627 million NIS compared to about 1,536 NIS for the same period the previous year, an increase of 6%. Profit before tax in the general insurance for the first half of 2010 totaled about 86 million NIS. The retained premiums in general insurance for the period of the report totaled about 945 million NIS, compared to 885 million NIS for the same period the previous year, an increase of 7%.


The scope of assets managed in the capital market and financial services sector as of June 30 2010 totaled about 23.3 billion NIS, compared to about 15.5 billion NIS as of June 30 2009, an increase of about 50%.

 

The increase emanates mainly from the increase in assets managed in trust funds (due to fundraising and increases in value), and as a result of the continued expanded activity in the exchange traded note sector.

 

The profits before tax from the capital market and financial services sector for the first half of 2010 totaled about 15.3 million NIS, compared to a loss of about 7.8 million NIS for the same period the previous year.

 

The Group's income from the capital market and financial services sector for the first half of 2010 totaled about 112 million NIS, compared to about 74 million NIS for the same period the previous year, an increase of about 52%.

 

The increase in income during the period of the report, compared to the same report the previous year, emanates mainly from an increase in the average scope of managed assets during the period of the report, compared to the average scope of managed assets during the same period the previous year and an increase in the income of the stock exchange member.


The share capital of the Group attributed to the shareholders of the Company as of June 30 2010 totals about 3.31 billion NIS compared to a share capital of about 3.1 billion NIS as of December 31 2009.

 

The increase in the share capital emanates from the profits of the period, the allocation of shares against the purchase of 35% of the share capital of Dikla and the dividend distribution of 107 million NIS. During the period of the report and thereafter, Harel Insurance raised Secondary capital of 700 million NIS which received an AA- rating by Standard & Poors Maalot while the rating of the promissory notes issued in 2006 remains AA and the corporate rating of Harel Insurance was set to AA+.


The total assets managed by the Group, in insurance, pension funds, provident funds, trusts finds and financial services on June 30 2010 totaled about 74 billion NIS.

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