Street Calls of the Week
Introduction & Market Context
Nawi Group, a leading non-bank business financing provider traded on the Tel Aviv Stock Exchange (TASE:NAWI), presented its second quarter 2025 financial results in August, showcasing continued growth despite regional challenges. The company, which specializes in business financing and real estate project funding, reported solid performance metrics while maintaining its strategic focus on secured lending with a strong emphasis on the real estate sector.
The company’s stock closed at ₪4,840 as of the latest trading session, down 0.81% or ₪39, trading well above its 52-week low of ₪2,731 but significantly below its 52-week high of ₪6,590.
Quarterly Performance Highlights
Nawi Group reported revenues of ₪214 million for Q2 2025, representing a 22% increase year-over-year. Net profit reached ₪84 million, up 9.1% compared to the same period in 2024, while total profit climbed to ₪90 million, a 13.9% year-over-year increase. The company maintained a strong return on average equity (ROAE) of 18.33% and announced a dividend of ₪45.7 million for the quarter, contributing to a dividend yield of 6.5%.
As shown in the following profit and loss data table, financing income grew substantially while the company managed to maintain profitability despite rising financing expenses:
The company’s balance sheet continued to strengthen, with equity reaching ₪961 million as of June 30, 2025, up from ₪912 million at the end of 2024. The total credit portfolio expanded to ₪4.8 billion, representing significant growth from ₪3.94 billion in December 2024.
This growth continues a multi-year trend of steady expansion in both the company’s equity position and lending portfolio, as illustrated in the following chart:
Detailed Financial Analysis
Nawi Group’s credit portfolio has shown consistent growth over the past four years, nearly doubling from ₪2.49 billion in Q2 2021 to ₪4.81 billion in Q2 2025. This expansion reflects the company’s successful execution of its growth strategy in the non-bank financing sector.
The company’s financial performance has been characterized by parallel growth in both financing income and expenses, with net profit maintaining a steady upward trajectory:
Risk management remains a key focus for Nawi, with 75% of its credit portfolio (₪3.68 billion) backed by guarantees. The company also maintains a relatively short average portfolio lifetime of 11 months, which helps manage risk exposure while enabling capital recycling for new lending opportunities.
Strategic Initiatives
Nawi Group’s portfolio composition reveals a heavy concentration in real estate lending, which accounts for 76% of the total portfolio, with the remainder distributed across various sectors including commerce (4%) and others.
The company has identified several growth engines to drive future expansion, including strengthening corporate governance, expanding real estate activities, diversifying funding sources, and developing consumer credit backed by securities.
This strategy is supported by a diversified funding structure that includes ₪4.4 billion from banks, ₪979 million from capital markets (NY"M), and ₪202 million from capital markets (Agach).
Forward-Looking Statements
Nawi Group has outlined ambitious targets for 2025-2026, projecting its lending portfolio to grow to ₪4.3 billion by the end of 2025 and ₪5 billion by 2026. Similarly, the company expects its equity to reach ₪960 million in 2025 and ₪1.06 billion in 2026.
The company also highlighted its preparedness for ongoing regional challenges related to the "Swords of Iron" War, noting that it has ₪557 million in untouched credit lines, continued banking system support, and the technological infrastructure to maintain operations remotely if necessary.
Key initiatives for future growth include establishing in-house project escort services and obtaining a home loan lending license in 2025, which the company expects will significantly expand its market reach and service offerings.
With a strong capital position, diversified funding sources, and a focus on secured lending primarily in the real estate sector, Nawi Group appears well-positioned to continue its growth trajectory despite regional uncertainties and market fluctuations.
Full presentation:
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