Menora Mivtachim Holdings: How Much Of 2025 Profit Is Actually Available At The Parent
This follow-up isolates the upstream path from the subsidiaries to the holdco. Roughly NIS 1.42 billion actually moved to the parent in 2025, but shareholder access is still filtered through solvency buffers, parent-only liquidity, and rating discipline.
What Actually Reaches The Parent
The main article established that Menora's 2025 profit was stronger than the headline and that the dividend story was not built on accounting noise alone. This follow-up isolates the narrower question that matters more in a holding company: how much of that profit actually reaches the top of the structure, and in what quality.
This is the real test. In a holdco, consolidated profit is only an intermediate station. Value becomes accessible to shareholders only after three filters: how much capital can legally and practically move up from the subsidiaries, how much stays liquid at the parent on a solo basis, and how much of that remaining balance can be distributed without colliding with rating discipline and investment plans.
By that standard, 2025 was a strong year. During the year the subsidiaries distributed about NIS 1,417 million to the parent: NIS 1,200 million from Menora Insurance, NIS 117 million from Menora Pension and Gemel as Menora Holdings' share, and NIS 100 million from Shomera. In the same year the parent distributed NIS 600 million to shareholders. In dividend terms alone, only about 42% of what came up from the subsidiaries was passed through in that same year. That is not the behavior of a parent operating on a thin liquidity cushion.
But not all of that NIS 1.417 billion is the same type of value. Most of it came from Menora Insurance. So the key question is not only whether the group earned a lot, but whether the main upstream engine can keep generating a safe cushion above regulatory minimums and above the board's own target even after distributions.
The First Filter: Capital Buffers At The Subsidiaries
The Menora Insurance figures show why 2025 was a relatively easy year for upstreaming capital. As of 30 June 2025, the insurer's solvency ratio stood at 151.0% without transition measures. After the effect of material capital actions that took place after the calculation date, the ratio rose to 167.1%. The board target for that period was 115.9%, so the gap remained wide. The estimated ratio for 30 September 2025 was also about 164.8% under the transition regime. That is not a license for unlimited dividends, but it is precisely the capital cushion that made 2025 upstreaming possible.
Shomera is a smaller engine, but it was not operating on the edge either. As of 30 June 2025 its solvency ratio stood at 122.9% against a board target of 113%, with roughly NIS 60 million of excess capital versus the target. This is a supportive contributor, not a substitute for the parent's dependence on Menora Insurance.
Menora Pension and Gemel adds a different kind of visibility. According to Note 20, as of 31 December 2025 it had NIS 955.6 million of existing capital against a capital requirement of NIS 337.6 million, which implies NIS 617.9 million of excess capital. Even after a NIS 60 million dividend declared after the reporting date, the excess still stood at NIS 557.9 million. Its dividend policy also commits to distributing at least 70% of annual distributable profit as long as at least NIS 30 million of liquid assets remain above regulatory capital requirements. That makes Pension and Gemel a relatively visible source of cash to the parent, but still not a free-cash machine outside a capital and liquidity framework.
| Layer | Key datapoint | Why it matters for the parent |
|---|---|---|
| Menora Insurance | 167.1% on 30 June 2025 after capital actions, versus a 115.9% target | The main upstream engine operated with meaningful room |
| Menora Insurance | 164.8% in the 30 September 2025 estimate | Even after continued distributions, the ratio did not look stretched |
| Shomera | 122.9% versus a 113% target, with roughly NIS 60 million of excess capital | Helpful, but not enough to remove the parent's dependence on Menora Insurance |
| Pension and Gemel | NIS 557.9 million of excess capital even after a NIS 60 million post-balance-sheet dividend | A secondary upstream source with relatively high visibility |
The most important line in Note 20 is not one ratio or another. It is the rule itself. An insurer can distribute only if, after the distribution, it remains above 100% without transition measures and above the board-defined solvency target. That means the profit generated lower in the structure is not automatically accessible to the parent. It first has to pass through a capital filter.
There is another point the market can easily underappreciate: the target at Menora Insurance is still rising. Note 20 states that from the end of 2024 the target capital level increases gradually from 115% to 130% by 2032, and by 31 December 2025 it already stood at about 116.9%. So 2025 did not just show strong distribution capacity. It also marked the start of a period in which the internal hurdle is moving higher.
The Second Filter: What Stays Liquid At The Parent
This is where the funding-sources section of the directors' report matters as much as solvency. At the parent itself, financial liabilities at 31 December 2025 were only about NIS 229 million: roughly NIS 54 million of Series G bonds due in 2026 and a put option on non-controlling rights of roughly NIS 175 million. Against that, the parent reported about NIS 1,344 million of liquid financial assets.
At first glance that looks almost like surplus liquidity. But that figure explicitly includes roughly NIS 302 million of Menora Insurance capital notes. This is where accounting value and truly distributable value start to diverge. It is still a financial asset, but it is not the same thing as unrestricted cash sitting at the holdco waiting to be paid out.
That gap becomes much clearer in Midroog's rating lens. As of 30 September 2025, Midroog looked at only NIS 326 million of cash, cash equivalents, and financial investments at the parent, made up of NIS 9 million of cash and NIS 317 million of financial investments. Against that stood NIS 228 million of gross financial debt, so liquidity-to-debt was 143%, and the liquidity balance covered 586% of Series G debt service due on 30 September 2026.
| Parent-level metric | Amount | Analytical read |
|---|---|---|
| Liquid financial assets at 31 December 2025 | NIS 1,344 million | Includes NIS 302 million of Menora Insurance capital notes |
| Parent financial liabilities | NIS 229 million | Made up of NIS 54 million of Series G debt and a NIS 175 million put option liability |
| Midroog liquidity at 30 September 2025 | NIS 326 million | NIS 9 million of cash and NIS 317 million of financial investments |
| Midroog liquidity-to-debt | 143% | Strong, but far below the impression created by the NIS 1.344 billion line |
| Rating discipline | 100% coverage of the next 12 months of debt service | Keeps liquidity as a filter before distribution |
None of this says the parent is under liquidity stress. Quite the opposite, both the report and the rating describe a comfortable solo profile. What it does say is that investors should be careful with the shortcut that treats every holdco asset as equally distributable. The company itself stresses the importance of maintaining liquid financial assets for debt service and for the needs of the held companies, and Midroog adds a clear 100% debt-service coverage discipline on top of that.
What The March 2026 Window Already Shows
The post-balance-sheet period gives a very clean test of accessibility. In March 2026 the parent declared a NIS 500 million dividend. In the same window, Menora Insurance and Menora Pension and Gemel declared dividends to the parent of NIS 400 million and NIS 60 million respectively, with Menora Holdings' share of the latter equal to NIS 54 million. In other words, against NIS 500 million flowing down from the parent to shareholders, only NIS 454 million was declared to flow up to it in that same window.
That is not a distress signal, but it is an important reminder. Distribution at the top is not a one-for-one mechanical pass-through of whatever the subsidiaries happened to declare at the same time. It also rests on an existing liquidity stock, on capital-allocation priorities, and on the parent's willingness to use its own solo cushion.
This is exactly where Midroog's monitoring report adds another layer. In its base case for 2026 to 2027, Midroog assumes annual receipts of NIS 760 million to NIS 855 million, annual principal and interest payments of NIS 100 million to NIS 170 million, roughly NIS 18 million of holding-company overhead, and at the same time about NIS 1,580 million of investments in holdings and new ventures spread across the forecast years. In other words, even when capital is accessible to the parent, it still competes with three uses at once: debt service, shareholder dividends, and expansion capital.
Bottom Line
This continuation sharpens the distinction between profit created and profit accessible. In 2025 roughly NIS 1.42 billion actually moved up to the parent, the parent's solo debt remained modest, and the rating stayed at Aa2 with a stable outlook. Those are all signs that value did not stay trapped only at the consolidated level.
But that accessibility is not equal to consolidated profit. It still depends mainly on Menora Insurance, it is subject to a rising internal capital ladder, and it is filtered through parent-level liquidity discipline rather than through group profitability alone. So the key question for 2026 is not merely whether Menora keeps reporting high earnings, but whether those earnings continue to become surplus capital, pass through the dividend gate, and remain available after the parent's own liquidity and investment needs.
If the answer stays positive, 2025 will look like the year in which profit did not only show up in the accounts but also made its way to the top of the structure. If not, part of 2025's value will remain real at the group level, but not fully accessible as cash at the parent.
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