Nir Zuk secures exit route from costly Esh bet as Isracard buys into digital bank
The deal highlights high costs and slow rollout of new banking entrants.
Yitzhak Tshuva is positioning himself as a direct competitor to Amnon Shashua in the digital banking arena. Credit card company Isracard, controlled by the Delek Group, has signed a non-binding memorandum of understanding to acquire full ownership of digital bank Esh for up to NIS 500 million (approximately $161 million), alongside a $40 million investment in the bank’s technology company, Esh OS, at a pre-money valuation of $120 million.
The acquisition of the bank will be carried out through the allocation of Isracard shares. Existing shareholders of Esh, led by controlling shareholder Nir Zuk (13.2%), Yuval Aloni (17.9%), one of the bank’s founders and CEO, and Clal Insurance (11%), will receive Isracard shares valued at NIS 400 million (approximately $129 million). In the first stage, shares worth NIS 250 million ($81 million) will be allocated, with the remaining NIS 150 million ($48 million) subject to performance conditions. Additional milestones could yield up to NIS 100 million ($32 million) in cash.
The deal is expected to reach clarity on key conditions within about 60 days.
The transaction comes against the backdrop of the Bank of Israel’s “lean bank” reform, which would allow credit card companies and other financial institutions to accept deposits under relatively lenient capital requirements. The reform has already passed the Ministerial Committee for Legislative Amendments and is awaiting Knesset approval.
Esh has held a banking license since 2023 and currently operates on a limited basis among insiders, effectively serving as a regulatory shortcut for Isracard. The company estimates that the deal could be completed within the year, enabling a relatively rapid commercial launch.
However, from the perspective of the Bank of Israel, the merger of a credit card company with a bank-in-progress raises regulatory complexity. While the reform is intended to increase competition, such consolidation could reduce it if new entrants are absorbed into existing players. The central bank emphasized that no formal application has yet been submitted and that any request will be reviewed on professional grounds.
For Isracard, led by CEO Itamar Forman, the move represents one of the more expensive strategic options considered for expanding its activities.
Talks between Delek Group and Nir Zuk began in mid-2024, alongside parallel discussions about acquiring banking services from foreign providers. The completion of Delek’s acquisition of Isracard in August 2025, at a valuation of NIS 3.6 billion ($1.16 billion), accelerated negotiations and led to the current agreement.
Esh operates as a digital bank without a physical branch network, aiming to compete with One Zero Bank, which was founded by Amnon Shashua. Unlike One Zero, however, Esh has yet to launch publicly, raising questions about what exactly Isracard is acquiring for NIS 400 million.
Industry sources suggest the value lies primarily in technology and infrastructure: a platform capable of accepting deposits and supporting banking operations, capabilities that Isracard currently lacks. Combined with Isracard’s large customer base, this infrastructure could enable a relatively fast rollout of banking services.
The bank’s name, Esh (Equal Sharing), reflects an original model of sharing profits with customers, although no commitment has been made to maintain this approach following Tshuva’s entry.
One potential casualty of the deal is Clal Insurance, which invested more than NIS 200 million ($65 million) in Esh at significantly higher valuations. Under the current structure, the bank is valued at just NIS 400 million, though a higher future valuation of the technology arm could offset losses.
Nir Zuk, founder of Palo Alto Networks, remains the central figure behind Esh. Beyond fintech, he also holds a controlling stake in Air Haifa and was previously involved in the “Relevant” television venture, which shut down in 2024.
Total investment in Esh is estimated at around NIS 500 million ($161 million), meaning the current deal roughly reflects invested capital, with potential upside tied to holdings in the technology company (about 75%) and Isracard shares.
Some industry executives describe the deal as a “lifeline” for Zuk and other shareholders, following a nearly two-year delay in launching the bank. Esh had long sought additional capital to strengthen its position.
The risks, however, are significant. Esh has no active customer base, and the experience of One Zero Bank, reportedly incurring cumulative losses of around NIS 1 billion ($323 million), highlights the scale of investment required to build a viable banking operation. These costs are now likely to fall on Isracard and Delek.
Market sources note that Esh’s platform remains incomplete, with limited overdraft functionality and partial integration with credit cards. Delays are attributed, in part, to Zuk’s decision to build an independent system rather than rely on existing infrastructure.
Beyond operational challenges, the move also carries strategic risks. By entering banking, Isracard will compete directly with banks that are currently its partners. In response, those banks may scale back cooperation, including in card issuance, and redirect customers to competitors such as MAX.
The move comes less than seven years after Tshuva exited control of Phoenix Holdings due to regulatory constraints under Israel’s Concentration Law. His return to financial services through Isracard, approved by regulators after Delek ceased to be classified as a major real-sector conglomerate, marks a significant strategic shift.
Delek invested NIS 1.3 billion ($419 million) for a roughly 40% stake in Isracard, which is now valued at about NIS 5 billion ($1.61 billion), implying a paper gain of approximately NIS 550 million ($177 million).
Operationally, Isracard continues to grow. Net profit in 2025 reached NIS 298 million ($96 million), up about 15% year-on-year. Revenue rose to NIS 3.5 billion ($1.13 billion), a 9% increase. The company serves 3.7 million private customers and around 100,000 business clients, with a consumer credit portfolio of NIS 8.6 billion ($2.77 billion) and business credit of NIS 3.3 billion ($1.06 billion).
In essence, the deal is more than a single transaction. It represents a broader strategic gamble: transforming Isracard from a credit card company into a full-fledged bank, entering a competitive, heavily regulated and capital-intensive market where even established players struggle to generate consistent profitability.
