Business brief
Israeli Lenders and Defense Firms Post Record Earnings as Retail M&A Surges
Record banking profits, Elbit's expanding $32B backlog, and private equity exits highlight strong corporate earnings and active dealmaking in Tel Aviv.
Business
Global rearmament continues pushing Elbit's backlog to historic highs — converting European security demand into guaranteed multi-year revenue.
BackgroundElbit Systems is Israel's largest publicly traded defense manufacturer, developing electronic warfare, unmanned systems, and precision munitions. European sovereign defense budgets have expanded sharply over the past two years following increased regional security risks.
- International sovereign defense clients account for 73% of Elbit's record $32 billion order backlog, diversifying revenue away from purely domestic procurement.
- Key international growth drivers include a 5-year, $1.63 billion defense equipment supply agreement signed with Serbia's Ministry of Defense.
- Despite beating analyst profit estimates, defense stock prices faced modest profit-taking due to investor concerns over rising supply chain input costs.
Business
Record earnings show Israel's major lenders easily absorb targeted bank tax levies — propelled by strong balance sheets and resilient credit demand.
BackgroundIsraeli commercial banks earn earnings primarily through interest margin spreads on commercial credit and consumer deposits. Parliament recently passed a temporary profit tax surcharge on major lenders to help fund post-war national budget deficits.
- Bank Leumi absorbed a NIS 293 million special banking tax levy while expanding net credit to the public by 15.8%, reinforcing capital resilience.
- Bank Hapoalim delivered a 15% annualized return on equity alongside robust corporate lending growth, boosting investor confidence across the sector.
- Heavy institutional buying in Leumi and Hapoalim shares dominated equity trading volume on the Tel Aviv Stock Exchange throughout the session.
Business
A 3x payout for Kedma shows private equity can still execute profitable retail turnarounds — proving home improvement assets retain value despite volatile consumer spending.
BackgroundMulti Retail operates Israel's Ace hardware and Auto Depot chains, serving both retail consumers and commercial contractors. Kedma Capital acquired controlling equity a decade ago and restructured the store network to improve profit margins.
- The buyout values Multi Retail at NIS 240 million, triggering a 37.9% single-day stock rally on the Tel Aviv Stock Exchange.
- Kedma realized a 3x cash return totaling NIS 200 million across its 10-year holding period, including prior dividend distributions.
- Buyer Ronen Ganon plans to merge supply chain operations between Zol Stock discount stores and Ace home improvement outlets to lower overhead.
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