IBI Investment House published its second-quarter report. Two lines in it deserve attention, and neither of them is net profit.
Errors or inaccuracies are possible. Spotted something that looks wrong? Write to me and I will correct it.
The Quarter
| NIS millions | The quarter | Share of the top line |
|---|---|---|
| Top line | 479.3 | |
| Operating profit | 155.6 | 32.5% |
| Pre-tax profit | 142.6 | 29.7% |
| Net profit | 95.7 | 20.0% |
| Attributable to shareholders | 64.9 | |
| Non-controlling interests | 30.8 | |
| Basic earnings per share | NIS 4.61 | |
| Balance sheet total | 2,295.6 | |
| Shareholders' equity | 1,197.3 |
The gross profit line does not appear in the structured filing, and is therefore not presented here.
The First: A Third of the Profit to the Minority
Of net profit of NIS 95.7 million, NIS 30.8 million is attributable to non-controlling interests.
IBI shareholders are left with NIS 64.9 million - 67.9%.
And this is a structural fact at an investment house, and it is worth understanding why.
An investment house is not one entity - it is a group of activities: mutual funds, portfolio management, underwriting, brokerage, provident funds and sometimes real investments too. Some are wholly owned, and some are held in partnership with managers or with investors.
The company consolidates 100% of their results, including those it does not wholly own, and sets aside the partners' share in the final line.
So the 32.5% operating margin describes the consolidated group, not the shareholder's share in it.
And this is the same phenomenon that recurred this week at G City - 33.1% to the minority - and at Neto Holdings, where it was 55.8%.
And the Second: Almost Nothing Is Taken Below the Operating Line
From NIS 155.6 million of operating profit, NIS 142.6 million was left before tax. NIS 13.0 million was taken out - only 8.3%.
And that is among the lowest figures we saw over these two weeks.
| Q2 2026 | Financing as a share of operating profit |
|---|---|
| Generation Capital | 3.1% |
| IBI | 8.3% |
| Afcon | 16.5% |
| Dalia Energy | 63.0% |
| Nofar Energy | 121.9% |
And the explanation is simple: an investment house is not an asset-heavy business. It sells management services, and its balance sheet is small relative to its profit - a leverage ratio of just 1.9 to one.
There is no power station to fund, no vehicle fleet, and no branch network on long leases. And so almost all of the operating profit arrives intact at the pre-tax line.
And the Tax: 32.9%
NIS 142.6 million before tax and NIS 95.7 million after - that is, tax of NIS 46.9 million, an effective rate of 32.9%.
That is about ten percentage points above Israel's corporate rate.
And that gap is familiar at Israeli financial institutions, and we saw it this week at Clal Insurance too, which showed 33.3%. It generally arises from profit tax - an additional levy on certain financial institutions beyond the corporate rate.
But the structured quarterly filing does not detail the tax reconciliation, so I do not assert that this is the reason here.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
What interests me in this report is how clean the structure is at the top - and how complicated it becomes at the end.
An investment house is one of the cleanest businesses to read: no inventory, no manufacturing, no heavy leases. A 32.5% operating margin, and 91.7% of it reaches the pre-tax line.
And then two lines each erase a third: tax takes 32.9%, and the minority takes 32.1% of what is left.
The practical meaning: of every 100 shekels the group generated at the operating line, about 42 reached IBI's shareholders. And anyone reading only the net profit line sees 61.5 of them.
And the rule I hold - and this is the fourth time it has recurred this week - is that at any company with minority interests, the line relevant to the shareholder is "attributable to shareholders", not "net profit".
And what I would look for in the full accounts is a breakdown by activity segment. Mutual funds, underwriting and portfolio management have entirely different sensitivities to the market - and in a strong quarter on the exchange, some rise and some do not.
(It is important to stress: this is my personal opinion only, and nothing herein constitutes a recommendation to take any action.)
