Phoenix Financial (PHOE) Q1 2025 earnings summary

Executive summary

• Q1 2025 marked the first reporting period under IFRS 17 and IFRS 9, improving profitability, transparency, and reducing volatility, especially in insurance activities.

• Achieved comprehensive income of ILS 568 million (2.26 ILS/share) and return on equity of 21.3% for the quarter, with shareholders' equity at ILS 11.5 billion.

• Core income reached ILS 626 million (23.6% core ROE), driven by 43% growth in Asset Management and positive IFRS-17 impact in Insurance.

• Asset management and insurance businesses delivered strong organic growth, with synergies from recent acquisitions and expansion in Distribution, Financing, and Brokers & Advisors.

• Announced a quarterly dividend of ILS 230 million, shifting from semi-annual to quarterly distributions, with a minimum payout of 40% of distributable income.

Financial highlights

• Asset management income grew 43% year-over-year; adjusted EBITDA for Asset Management at ILS 1,185 million, targeting ILS 1.6–1.8 billion by 2027.

• Insurance segment generated ILS 631 million before tax; P&C delivered ILS 229 million, health ILS 237 million, and life ILS 105 million before tax.

• Brokers and advisors segment income was ILS 113 million before tax, with strong organic and M&A-driven growth.

• Financing segment income reached ILS 51 million before tax, supported by SME, construction, and consumer credit activities.

• Solvency ratio estimated at 183% at end of 2024, above long-term target range and regulatory thresholds.

Outlook and guidance

• On track to exceed 2027 income targets, with potential to reach ILS 2.4–2.6 billion ahead of schedule; targets to be updated in 2025 reflecting IFRS 17 impact and accelerated growth.

• Focus on high-margin, capital-light, cash-generating businesses and innovation, including AI and digital transformation.

• Dividend and buyback payout target above 50% of income by 2027.