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Migdal switches to Q3 profit

  • November 26, 2020

In the shadow of the long and bitter fight over the future of Migdal Insurance Company chairman Nir Gilad and the removal of controlling shareholder Shlomo Eliahu from any official position in the insurance company of which he owns 69%, Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) reported today that it switched to a net profit in the third quarter of this year. Migdal posted a comprehensive profit of NIS 46.8 million, which compares with a loss of NIS 82.2 million in the corresponding quarter of 2019. This comes against a background of a rising stock market, which boosted the group’s investment income, a trend that can be expected to characterize all the financials of the major insurance companies.

For the first nine months of 2020, Migdal, headed by CEO Ran Oz, posted a net loss of NIS 14.5 million, which compares with a profit of NIS 570.8 million in the corresponding period of 2019. Alongside this, Migdal has reported nostro profits recently, which means that it will return to charging variable management fees in the fourth quarter. This is important for Migdal, which has the largest with-profit portfolio in the sector, and variable management fees represent an important component of its profits, yielding revenue in the hundreds of millions of shekels when returns are positive. In the first nine months of this year, Migdal did not collect variable management fees because of the negative returns for its policyholders, which, as mentioned, have turned around and become positive in the fourth quarter.

At the end of September, Migdal has assets under management of NIS 295 billion, NIS 3 billion more than at the start of the year. Because of the strong rises in the capital markets recently, the group’s total assets under management now amount to NIS 308 billion.

“In recent months we have accelerated processes to do with innovation, both in investment and in digitalization,” Oz said. Oz stressed Migdal’s commitment to ESG (Environmental, Social, and Corporate Governance), an investment policy that he said the company believed would become the standard for responsible investment globally and in Israel.

Published by Globes, Israel business news – en.globes.co.il – on November 26, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020


Article source: https://www.globes.co.il/en/article-1001351018

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