Meitav in the First Quarter: Strong Profit, Dividends and Deals Put Cash Back at the Center
Meitav's first quarter shows a sharp rise in revenue and profit, backed by strong net inflows and managed assets that reached NIS 448 billion by the end of April. But after dividends, the partial Peninsula tender offer and continued asset moves into public subsidiaries, the quality of growth depends more on parent-level cash flexibility.
Meitav opened 2026 with a quarter strong enough to answer part of the question left open at the end of 2025: the core business is not only benefiting from a good market, it is also growing assets, management fees and segment profit at a pace that creates operating leverage. Group revenue rose to NIS 598 million and profit attributable to shareholders, excluding the legal-claims effect, rose to NIS 128 million, but this is not a simple story of higher profitability. Consolidated operating cash flow recovered to NIS 145 million, while the parent company still posted negative operating cash flow of NIS 12 million and continued to distribute, acquire and move assets inside the group. The attempt to delist Peninsula did not reach the compulsory-sale threshold, so credit exposure increased but the complexity did not disappear. The transfer of brokerage activity into Meitav Trade is already showing up in the numbers, but it also reminds investors that value inside the group does not always sit fully at the parent-company layer. The quarter therefore improves the operating thesis, but it does not clean up the capital-allocation thesis: the next reports need to show that inflows, credit and brokerage keep producing profit without consuming too much cash or diluting shareholders' access to value.
Profit Jumped, but the Source of Improvement Matters More
Meitav is an investment house with four engines that work differently: long-term savings, current savings, brokerage and non-bank credit. The two savings engines generate management fees on managed assets, brokerage benefits from account count and trading activity, and credit adds financial spread but also consumes funding sources and risk capital. That split matters because the quarter looks strong from almost every angle, yet not every shekel of profit has the same quality.
The strongest number in the quarter is not only the 32% rise in revenue, but the fact that segment profit grew faster in the management-fee engines. Long-term savings increased revenue to NIS 242 million and segment profit to NIS 82 million. Current savings increased revenue to NIS 149 million and segment profit to NIS 76 million. In both cases, profit growth was much higher than revenue growth, a positive sign of operating leverage.
| Activity engine | Q1 2026 revenue | Change vs Q1 2025 | Q1 2026 segment profit | What it means |
|---|---|---|---|---|
| Long-term savings | NIS 242 million | +36% | NIS 82 million | Net inflows and higher fees are reaching profit |
| Current savings | NIS 149 million | +41% | NIS 76 million | Funds and portfolios benefit from higher assets and better fee rates |
| Brokerage | NIS 80 million | +23% | NIS 34 million | Account growth and market activity continue to support growth |
| Non-bank credit | NIS 98 million | +8% | NIS 37 million | The engine still contributes, but growth is slower and depends on funding cost |
Flows explain why the quarter matters. Provident funds and pensions recorded net deposits of about NIS 3 billion and net transfers of about NIS 10 billion. Active funds raised more than NIS 3 billion, and portfolio management raised more than NIS 1 billion. This is not only a rising-market effect: part of the growth comes from clients and new money entering the platform.
Brokerage is also advancing. The activity added about 9,700 clients during the quarter, reached 123,500 clients at the end of March and 125,500 at the end of April. But here, activity growth should be separated from value capture. After the completion of the transfer of Meitav Brokerage to Meitav Trade, the group holds about 71.96% of Meitav Trade's share capital, and about 64.61% on a fully diluted basis. Brokerage profit grew, but part of its economics is now shared with minority shareholders at that layer.
Consolidated Cash Improved, the Parent Still Requires Discipline
At the consolidated level, there is a positive change versus 2025. Operating cash flow reached NIS 145 million, compared with NIS 112 million in the parallel quarter, after a year in which full-year operating cash flow was negative. This is real progress: profit is now backed by cash, not only by accounting earnings.
Still, the frame here is cash flexibility after actual cash uses, not operating cash flow alone. During the quarter, the group recorded negative investing cash flow of NIS 41 million and negative financing cash flow of NIS 9 million, so consolidated cash increased by NIS 95 million. At the parent-company layer, however, the picture is tighter: operating cash flow was negative by NIS 12 million, cash declined to NIS 35 million, and the parent also relied on NIS 319 million of short-term investments.
| Cash layer | What happened in the quarter | Investor meaning |
|---|---|---|
| Consolidated group | NIS 145 million operating cash flow | Quarterly profit is better supported by cash |
| After investing and financing at group level | Cash increased by NIS 95 million | The quarter itself generated surplus before post-balance-sheet shareholder distributions |
| Parent company | Negative operating cash flow of NIS 12 million | Access to cash still depends on subsidiaries, short-term investments and capital markets |
| Distributions around the quarter | NIS 59 million dividend paid in April and another NIS 64 million declared in May | The payout policy returns cash to shareholders, but reduces room for maneuver |
This matters because Meitav presents a policy of distributing at least 50% of net profit. The quarter supports a dividend on an earnings basis, but it does not remove the need to test what remains after distributions, acquisitions and repayments. Several capital uses are already visible around the quarter: a NIS 59 million dividend declared in March and paid in April, another NIS 64 million dividend approved in May, and the deposit of the full NIS 40.4 million consideration into escrow for the acquisition of 50.5% of Yahad, subject to closing conditions. Covenants are far away, so the issue is not covenant proximity but the quality of practical flexibility at the parent layer.
Credit and Deals Increase Exposure, Not Simplicity
The non-bank credit segment continues to contribute profit, but it is no longer the engine that explains most of the quarter's improvement. The credit portfolio stood at NIS 3.67 billion at the end of March, almost unchanged from the end of 2025, with NIS 1.71 billion at Peninsula, NIS 1.13 billion in the group's lending activity and NIS 0.83 billion at Lotus. Within Lotus, NIS 361 million comes from debt funds managed by Lotus, so not every shekel in the portfolio sits on the same risk layer for the group.
Credit revenue rose to NIS 98 million from NIS 91 million in the parallel quarter, and segment profit rose to NIS 37 million from NIS 34 million. That is improvement, but not a breakout. Credit-related financing expenses totaled NIS 42 million, about 43% of credit revenue. The decline from NIS 53 million in the fourth quarter of 2025 helps, but the engine remains highly sensitive to funding costs and credit quality.
The event that sharpens the risk is the tender offer for Peninsula. After the prior analysis of the tender offer, the outcome is clearer: Meitav did not cross the compulsory-sale threshold, bought 17.8 million shares of Peninsula using 461,000 of its own shares, and increased its holding in Peninsula to 87.83%. This is relatively comfortable for the cash balance because the consideration was paid in treasury shares rather than cash, but it does not give full ownership and does not remove the minority layer.
The legal side and smaller transactions also show that the structure is not yet simple. The company issued 546,695 treasury shares for an indemnity of NIS 51.6 million, cancelling the provision balance for that indemnity. At the same time, group provisions for legal claims still total about NIS 85 million, and in May the group learned of a new motion to certify a class action against the provident and pension activity. The Yahad acquisition can expand other revenue, which already jumped to NIS 29 million, but it remains subject to a corporate license and a tax ruling. Most of the events around the quarter improve options, not simplicity.
The Quarter Improves the Operating Thesis, Cash Will Set the Next Read
Management expects 2026 profitability growth of about 20% or more, subject to financial-market conditions, strategic initiatives and improved operating leverage. The first quarter supports that framing: profit attributable to shareholders, excluding the legal-claims effect, was NIS 128 million versus NIS 96 million in the parallel quarter, and adjusted EBITDA rose to NIS 253 million. Managed assets of NIS 448 billion at the end of April also give the second quarter a good starting point.
Still, 2026 needs to be a proof year. Net inflows need to remain positive even if capital markets become less supportive. Credit funding costs need to keep declining, or at least not return to fourth-quarter levels. The parent company needs to preserve accessible cash and investments after dividends, the Yahad acquisition, the partial tender for Peninsula and the continued Meitav Trade structure.
Short-interest data does not point to unusual pressure. Short interest as a percentage of float stood at 0.55% in mid-May, below the sector average of 1.17%, and SIR stood at 1.39. Near-term market reaction is therefore likely to be more sensitive to continued flows, distributions, credit profitability and second-quarter results than to a technical short position.
The current conclusion is that the quarter strengthens Meitav's operating side, but does not make the story simple. Management fees are working, brokerage is growing, credit remains profitable, and consolidated cash flow is positive again. The strongest counter-thesis is that the quarter benefited from supportive markets and a cluster of capital moves that are not necessarily recurring. For the read to improve, the next two to four quarters need to show that asset growth remains, credit margin does not erode, and the parent company preserves flexibility after distributions and deals.
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