Meitav Trade in the First Quarter: Institutional Brokerage Lifts Profit as Retail Trading Slows
Meitav Trade opened 2026 with NIS 80.4 million of revenue and NIS 21.5 million of net profit, but the main point is not only growth. The first quarter that includes Meitav Brokerage shows a real institutional profit layer, while the retail engine keeps adding accounts but slowed versus the previous quarter.
The first quarter gives the first real answer to the question left open at the end of 2025 for Meitav Trade: whether the Meitav Brokerage acquisition merely increases consolidated numbers, or actually changes earnings quality. The answer leans positive, but it is not clean. Revenue rose 22.8% to NIS 80.4 million and net profit rose 22.6% to NIS 21.5 million, with Meitav Brokerage already contributing NIS 21.3 million of revenue and NIS 8.0 million of segment profit. Still, the retail engine did not deliver the same kind of quarter: trading-service revenue declined versus the fourth quarter of 2025, even though the company added 9,700 new accounts. That makes 2026 a proof year: institutional brokerage is improving the mix, but the company still needs to show that new retail accounts generate deeper activity and that distributions do not crowd out capital needed for regulation, customer credit and clearing.
Institutional Brokerage Is Changing the Company
Meitav Trade is a public brokerage company that owns Meitav Trade Ltd., a non-bank TASE member providing trading, custody, clearing, credit and related services mainly to retail customers. Starting in 2026, it also includes Meitav Brokerage, an institutional brokerage business serving institutional and qualified clients in Israel and abroad. The company is therefore becoming a two-layer trading platform: broad retail activity on one side, profitable institutional brokerage on the other.
Its economic machine rests on trading and service fees, financing spreads, and now institutional brokerage revenue. Account growth is not enough by itself. A new account has to become trading activity, balances, FX conversion or customer credit. That was the issue raised in the previous Deep TASE annual analysis, Meitav Trade in 2025: the first quarter gives a partial answer because institutional brokerage is working better than feared, but retail still needs to prove depth of activity, not only account openings.
The important number in the quarter is not only total revenue growth, but who drove it. Institutional brokerage revenue reached NIS 21.3 million, compared with NIS 14.0 million in the comparable quarter, up 52.0%. Compared with the fourth quarter of 2025, when institutional brokerage revenue was NIS 14.5 million, the increase was 47.2%. This is no longer a small line that makes the top line look better.
Segment profit tells an even stronger story. Institutional brokerage contributed NIS 8.0 million of segment profit in the first quarter, almost double NIS 4.2 million in the comparable quarter. Its segment margin rose to roughly 37.6%, compared with about 29.7% in the comparable quarter and 29.9% for full-year 2025. In other words, the expansion did not only add volume. It added an activity layer whose profitability improved quickly.
This supports the earlier follow-up analysis on the Meitav Brokerage transaction, Meitav Brokerage inside Meitav Trade. The conclusion there was that the transaction looked like the acquisition of an existing profit layer at a moderate price, but that 2026 would need to show what was actually added. The first quarter gives the first positive sign: institutional activity did not remain a general synergy promise. It contributed roughly 27% of revenue and 25% of segment profit.
The remaining friction is transparency over time. The investor presentation talks about scale advantages, new growth engines, deeper collaboration and diversified revenue sources. The quarter supports the direction, but it still does not separate a strong trading environment from the acquired business itself and real operating synergy. In the coming quarters, the market is likely to focus on whether high institutional segment profit can persist without making results less predictable.
Retail Account Growth Still Needs More Depth
The retail side is not weak, but there is a clear yellow flag. The company added about 9,700 new accounts in the first quarter and reached roughly 123,500 accounts at the end of March and 125,500 at the end of April. That continues the customer-growth story.
Still, customer activity did not move at the same pace. TASE-member service revenue was NIS 37.2 million, up 18.3% versus the comparable quarter, but the company's presentation shows trading-service revenue declining from NIS 37.9 million in the fourth quarter of 2025 to NIS 36.2 million in the first quarter of 2026. Foreign-market customer activity declined versus the fourth quarter, partly offset by higher Israeli activity.
The implication is that opening an account is still not the same as generating deeper revenue per customer. The TASE-member segment, which includes retail brokerage and financing income, reported NIS 59.0 million of revenue and NIS 23.8 million of segment profit. Revenue rose 14.9% versus the comparable quarter, but segment profit rose only 8.1%, and the segment margin declined to about 40.3% from 42.8%. This does not break the model, but it reminds investors that customer-base growth comes with operating, marketing, technology and payroll costs.
Financing income was NIS 21.8 million, compared with NIS 19.9 million in the comparable quarter and NIS 21.2 million in the fourth quarter of 2025. The increase is mainly explained by deposits. For a brokerage platform, this is legitimate, but it depends on interest rates, customer balances and activity structure. If retail is to drive profit again, new customers need to generate more trading and service activity, not only a broader base for financing income.
Cash Improved, but Distributions Still Need a Liquidity Filter
On cash, the quarter looks strong. Operating cash flow was NIS 26.2 million, compared with NIS 7.1 million in the comparable quarter. Cash flow benefited from profit, lower customer credit and T+1 clearing movements. At the same time, investing activity contributed NIS 12.8 million from the realization of deposits and securities, while financing activity used NIS 12.1 million, mainly due to repayment of a NIS 10 million loan to Meitav and NIS 3 million of capital notes.
All-in cash flexibility after the quarter's actual cash uses looks positive: cash increased by NIS 26.9 million to NIS 134.3 million, while cash together with bank deposits, restricted and designated cash and securities totaled about NIS 203.9 million. But that is not all free cash. Part of the balance is tied to clearing, collateral, customer credit and Tier 1 capital. After the balance-sheet date, the TASE Clearing House notified the company that Meitav Trade's share in the risk fund would be about NIS 54.6 million. That number is the reminder that gross liquidity should not be read as if it were all accessible to shareholders.
| Layer | First-quarter number | Meaning |
|---|---|---|
| Operating cash flow | NIS 26.2 million | Profit converted into cash much better than in the comparable quarter |
| Realization of deposits and securities | NIS 12.8 million | Supported cash, but came from a decline in other liquid assets |
| Financing activity | NIS 12.1 million outflow | The company reduced debt and capital notes rather than relying on them |
| Dividend declared in March and paid in April | NIS 13.9 million | The cash left only after quarter-end |
| Dividend approved in May | NIS 15.4 million | The payout policy remains assertive relative to quarterly profit |
The dividend is central. The company presents a policy of distributing 75% of net profit, and on May 24, 2026 it approved a NIS 15.4 million dividend for the first quarter. Relative to NIS 21.5 million of net profit, that is close to policy. Together with the NIS 13.9 million dividend paid in April for the previous quarter, roughly NIS 29.3 million of distributions were approved around the quarter's publication. That is not necessarily a problem, because the company generates cash and reduced debt, but each quarter still needs the same filter: gross liquidity versus what remains after collateral, risk fund, customer credit and Tier 1 capital.
Litigation is not the center of the quarter, but it sits in the same operating area. A new motion to certify a class action was filed in February 2026 regarding customers charged interest after balances were shown as available before being credited. The applicants estimated the represented group's claim at more than NIS 2.5 million, and the company cannot yet assess the certification prospects. Relative to profit, equity and liquidity, this number does not move the thesis, but it points to a sensitive friction point: trading systems, available balances, customer credit and interest.
Conclusions
Meitav Trade entered 2026 with a quarter that strengthens the thesis, but also shifts its center of gravity. The new strength is institutional brokerage, which already provides a quarter of segment profit and shows that the Meitav Brokerage transaction is not only a scale expansion. The weaker point is that retail keeps adding accounts, but trading-service revenue declined versus the previous quarter and profitability in the TASE-member segment eroded. The current conclusion is cautiously positive: the business is becoming more diversified and more profitable, but the quality of customer growth still needs proof in trading, services and recurring cash flow.
The strongest counter-thesis is that the quarter already delivered what mattered: record revenue, strong net profit, 9,700 new accounts, high operating cash flow and continued distributions to shareholders. That is a reasonable argument. It will strengthen if Meitav Brokerage keeps high segment profit, trading-service revenue returns to growth, and the company continues distributing cash without increasing collateral, customer credit or reliance on capital notes. It will weaken if customer growth remains mostly a quantity metric, if institutional profit proves volatile, or if gross liquidity continues to look high while much of it stays tied to clearing and regulation.
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