Business brief
Israeli Corporate Earnings Rally as Big Tech Consolidates Local R&D
Record bank profits and food manufacturing turnarounds contrast with selective Big Tech cutbacks in Tel Aviv.
Business
Bank Leumi's historic quarterly earnings demonstrate resilient domestic corporate health — high interest margins and disciplined credit risk are driving record bank profitability.
BackgroundBank Leumi is one of Israel's two dominant commercial banking institutions alongside Bank Hapoalim. Israeli banks have benefited from solid corporate credit demand and sustained domestic interest rate margins.
- Quarterly net profit rose 8.5% year-over-year to ₪2.83 billion, supported by low credit loss provisions and steady expansion across corporate loan portfolios.
- The board approved ₪1.4 billion in capital returns to shareholders through direct cash dividends and ongoing share repurchases, reflecting sustained balance-sheet strength.
- Leumi maintained a top-tier global efficiency ratio of 24.7% despite local special banking tax surcharges, preserving strong profitability amid regulatory headwinds.
Business
Big Tech's global engineering consolidation is impacting local R&D outposts — Microsoft is trimming non-core development teams to cut operating expenses.
BackgroundGlobal technology corporations frequently acquire Israeli startups to establish dedicated local engineering centers. Tech parent companies have lately been consolidating distributed R&D units to streamline operating expenditures.
- The decision eliminates nearly all local technical roles, leaving only a small commercial advertising sales team operating in Israel.
- The closure forms part of broader cost-reduction restructuring across Microsoft's global business application divisions, targeting non-core international engineering hubs.
- Former Oribi team members will receive severance packages while local Israeli tech firms actively recruit affected software engineers.
Business
Strauss Group's operational turnaround is yielding results — widening margins and strong domestic grocery demand doubled shareholder net profits.
BackgroundStrauss Group is Israel's largest consumer food manufacturer, operating across dairy, coffee, and fresh dip categories. The company has spent several quarters restructuring international operations to restore domestic profitability.
- Operating margin broadened to 12.6% compared to 8.3% in the prior-year period, supported by lower raw material input costs and streamlined operations.
- Free cash flow recovered sharply to positive NIS 150 million, enabling the board to declare a NIS 180 million semi-annual dividend to shareholders.
- Total second-quarter revenues reached NIS 2.87 billion, highlighting durable consumer spending across retail grocery channels despite broader economic uncertainty.
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