Menora Mivtachim Holdings: Does The New Credit Platform Really Diversify The Group
Menora's credit platform is already large enough to change the group story: in 2025 it became a reported segment with NIS 183.4 million of pre-tax profit, and in early 2026 the ERN and Yesodot moves materially expanded its scope. But this is only partial diversification, because less dependence on insurance and capital markets comes with heavier exposure to underwriting, real estate, and execution.
What Really Changes When Credit Becomes a Segment
The main article looked at the group as a whole. This follow-up isolates the credit layer, because in 2025 it already became a reported operating segment, and between January and February 2026 the group both completed the purchase of the remaining ERN stake and raised its holding in Yesodot to 60.1%. This is no longer a side activity inside an insurer. It is a business leg that can change how the whole group is read.
The numbers explain why. In 2025 the credit segment generated NIS 432.9 million of revenue, NIS 183.4 million of pre-tax profit, and NIS 6.0 billion of assets. At the same time, the direct credit book rose to NIS 4.983 billion from NIS 3.415 billion, and including associates it reached NIS 8.301 billion versus NIS 5.810 billion a year earlier. That is now large enough to create real diversification in the earnings base, but also large enough to introduce a meaningful new risk layer if underwriting, funding, or execution slip.
The group is also explicit about the strategic reason for the move: to reduce the effect of capital-market volatility on group results and diversify income sources. In that sense, the platform does create real diversification. Credit adds an engine that is not built only on insurance underwriting, and on paper the customer base is spread as well: no single customer accounts for 10% of group revenue, the largest borrower in the credit business represents about 4% of the gross credit book, and the top ten borrowers together represent about 20%.
But this is exactly where the reading needs to stay disciplined. The diversification is real, but it is not clean. Menora is not moving from one risk engine into a light, stable service model. It is replacing part of its dependence on insurance and capital markets with heavier dependence on lending, underwriting, funding, and the real-estate and consumer credit cycle.
Where The Diversification Is Real
At the activity level, Menora's credit platform is broader than one headline suggests. Business credit is managed through Menora Insurance, Ampa Capital, Yesodot, and Menora ERN. Consumer credit comes through Menora ERN and through Menora Insurance's mortgage activity, including reverse mortgages. That means the group is not relying on a single product, but on a mix of business lending, vehicle and equipment finance, real-estate finance, merchant payment advances, point-of-sale consumer lending, and mortgages.
Customer diversification also looks reasonably solid. The company describes a broad customer base across sectors and regions, with no dependence on a single borrower. That matters, because an insurer moving into non-bank credit can easily end up with a concentrated book built around a handful of large names. That is not what is disclosed here.
ERN adds something the group did not previously have at the same scale: activity tied to payments, merchant receivables, and consumer credit at the point of sale. This is not just insurance risk in a different wrapper. It is a separate operating layer, with a different transaction cycle and different exposure to checks, direct debit instructions, and point-of-sale consumer loans.
But Most Of The New Platform Still Runs On Credit Economics
This is the large caveat. Out of the segment's NIS 432.9 million of revenue in 2025, about NIS 362.8 million came from net investment gains and financing income, while only NIS 70.1 million was classified as other income. In other words, about 84% of segment revenue still comes from spread and financing economics rather than from a light-fee service model.
That does not make the strategy wrong. It just defines the type of diversification more accurately. Menora did not build a service layer that smooths volatility. It built a larger credit platform. So the real question is not only whether revenue sources are broader, but whether underwriting quality and funding access are strong enough for that broader platform to reduce group-level risk in practice.
The 2025 growth bridge tells the same story. The company says the increase in credit profit included about NIS 19 million from Yesodot, which was consolidated for the first time in 2025, and about NIS 28 million from continued growth in ERN and Ampa. So almost the entire annual step-up came from two sources: scale expansion through acquisition and organic growth in the existing credit platforms. That absolutely builds size. It does not yet prove that Menora built a structurally less cyclical engine.
Yesodot Changes The Type Of Risk, Not Just The Size
Yesodot is the main reason the diversification headline needs to be tested carefully. The original January 27, 2025 agreement set two subordinated credit facilities of NIS 200 million each, one from Menora Insurance and one from the investor, while the investor's facility was convertible into 50.1% of Yesodot's shares. The parties also signed a shareholders agreement with three mutual Put and Call options over up to four years, at the end of which the investor could reach 100% ownership.
After the balance-sheet date, that stopped being theoretical optionality. On January 5, 2026 an agreement was signed to exercise 50.1% of Yesodot's shares against part of the NIS 150 million facility, and at conversion the investor would buy an additional 10% so that ownership would reach 60.1%. On February 25, 2026 the company reported that the closing conditions had been met and that it now held 60.1% in practice.
That matters because Menora is not just financing a real-estate accompaniment platform. It is taking control of it. And Yesodot operates exactly in the area that the company itself describes as more sensitive to interest rates, project timetables, developers' debt-service ability, and the construction cycle.
This chart is the core of the thesis. The four real-estate categories in the direct credit book, residential projects, commercial projects, income-producing assets, and land, rose together from about NIS 467.5 million at the end of 2024 to NIS 1.723 billion at the end of 2025. That is already about 35% of the direct credit book. So yes, the credit platform diversifies Menora relative to insurance. But inside the platform itself, the mix has clearly moved toward real-estate finance.
The filing does offer a partial cushion. Inside the real-estate book, 84.6% of exposure sits at LTV up to 60%, only 3.3% is in the 60% to 75% band, 11.4% in the 75% to 90% band, and just 0.7% in the 90% to 100% band. The company also notes that these loans carry variable interest tied to prime. That helps, but it does not solve the issue. Lower LTV gives a better collateral buffer, but it does not eliminate project delays, slower sales, or developers' funding stress.
ERN Really Broadens The Platform, But It Also Brings A Different Risk
If Yesodot deepens the real-estate leg, ERN is supposed to be the balancing engine. Here the diversification is more genuinely different: merchant payment guarantees for checks and direct debit instructions, payment advances and financing for approved merchant transactions, and point-of-sale consumer credit, including vehicle loans secured by the purchased car.
The ownership step is also clear. On January 11, 2026 Menora signed an agreement to buy the remaining 30% of ERN for about NIS 230 million, at a company value of about NIS 770 million, taking ownership to 100%. The company also stated that the required regulatory approvals had already been obtained.
But ERN does not bring diversification alone. It brings another risk type. The company explicitly lists payment cards, payment apps, and adjacent payment services as competitors to the check and direct-debit related activities. So Menora is indeed moving away here from pure insurance risk, but it is moving into a world where credit underwriting meets technology substitution and where structural declines in deferred-check usage could matter over time.
| Platform | What it adds to the group | What risk comes with it |
|---|---|---|
| ERN | Diversification into merchants, payments, and consumer credit, including point-of-sale activity and payment advances | Competition from cards and payment apps, plus exposure to consumer and merchant underwriting quality |
| Yesodot | Control of a real-estate finance and accompaniment platform, with a path to full ownership | Deeper exposure to developers, project timetables, real estate, and execution |
| Ampa and Menora Insurance | Breadth in business lending, vehicle and equipment finance, and real-estate credit | Continued dependence on funding access and disciplined underwriting through the cycle |
That table is the real summary. Menora is building a broader platform, but not one that diversifies risk evenly. ERN and Yesodot do not offset one another perfectly. ERN broadens the group into payments and consumer credit, while Yesodot pushes harder into real estate. If 2026 shows that these are truly two distinct engines operating with good risk discipline, the thesis strengthens materially. If one of them stumbles, the diversification story will look much thinner.
So Does The Credit Platform Really Diversify The Group
The short answer is yes, but not in the clean way the headline suggests. Yes, because Menora no longer depends only on insurance, pensions, and the investment portfolio. It now has a large credit leg with many customers, a business-credit engine, a consumer-credit engine, and a real contribution to profit. But no, if the idea is that the group has simply moved into a more stable and less risky earnings structure. Most of the segment's economics still rest on financing spreads, and the largest early-2026 move so far, Yesodot, deepens exposure precisely to real-estate finance.
That is why 2026 is the real proof year for the platform. The decisive questions are not whether the book will keep growing, but whether full ERN ownership can produce recurring profit without new pressure on credit quality, whether Yesodot can grow without pulling the whole segment deeper into project risk, and whether funding sources remain broad and competitive as the book expands.
Menora did build a real second engine here. That is an achievement. Now it has to prove that this engine raises the quality of the group, not just its complexity.
Disclosure: Deep TASE analyses are general informational, research, and commentary content only. They do not constitute investment advice, investment marketing, a recommendation, or an offer to buy, sell, or hold any security, and are not tailored to any reader's personal circumstances.
The author, site owner, or related parties may hold, buy, sell, or otherwise trade securities or financial instruments related to the companies discussed, before or after publication, without prior notice and without any obligation to update the analysis. Publication of an analysis should not be read as a statement that any position does or does not exist.
The analysis may contain errors, omissions, or information that changes after publication. Readers should review official filings and primary sources before making decisions.