Cembra improves revenues and profitability after six months

Over the first six months of the year, net operating income increased by 6% over one year to 250 million francs, while expenses contracted by 2% to 122 million.

The consumer credit and payment card specialist Cembra Money Bank saw its half-year performance accelerate over the first six months of the year. The establishment is counting on the launch of its new credit card, following the end of the partnership with Migros, and a “solid” development of its activity throughout 2022.

Over the first six months of the year, net operating income increased by 6% over one year to 250 million francs, while expenses contracted by 2% to 122 million, announced the Zurich establishment. Thursday in a statement.

In terms of profitability, pre-tax income rose by 16% to 113 million francs and net profit accelerated by 15% to 90.6 million.

While revenues are almost in line with the forecasts of analysts interviewed by the AWP agency, the net profit clearly exceeds the expectations of specialists.

Cembra also reported a stable default rate at 0.5% and value adjustments on losses of 15 million (+4%) francs. Its core capital ratio remained almost stable at 18.8%.

At balance sheet level, customer loans increased by 4% to 6.4 billion francs, including 2.3 billion (+2%) for consumer loans, 2.9 billion (+4%) for vehicle financing and 1.1 billion (+8%) for credit cards.

The number of payment cards issued increased by 4% to 1.09 million at the end of June.

The Swissbilling subsidiary, which specializes in deferred payment, posted volumes up 62% to 191 million francs.

Extended contracts

For the whole of the 2022 financial year, management expects a “solid” result and a return on equity of 13% to 14%. The new credit card offer, following the end of the partnership with Migros, and the investments in IT will, on the other hand, weigh on income and costs.

Medium-term ambitions have been confirmed. In autumn 2021, Cembra set itself new financial targets for the period 2022-2026, betting in particular on a return on equity of 13-14% for the years 2022-2023 and above 15% from 2024. A dividend of at least 3.85 francs is planned for 2022.

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The default rate is expected to rise once more, following hitting 0.5% in the first six months of the current year, risk chief Volker Gloe said in a conference call. During the coronavirus pandemic, Cembra took on fewer risky customers, lowering its default rate. The latter should rise to around 1% in the coming years.

With the end of the contract for the credit cards of the distributor Migros in June 2022, Cembra launched its own card called “Certo!”.

“We have made very good progress in executing our strategy and have reached an important milestone with the introduction of our own Certo credit card!”, CEO Holger Laubenthal said in a statement. The group will “continue to focus on its transformation program” which should make it possible to accelerate growth, added the manager.

Cembra also extended a series of new contracts. The credit card cooperation agreement with the French retail chain Fnac was extended in May for another two years, until the end of 2026. The same applies to the partnership with the French distributor of Conforama furniture, now valid until the end of 2027. In addition, Cembra will issue a new credit card for Spar.

On the Swiss Stock Exchange, investors did not seem convinced. After falling 5% shortly following the open, Cembra stock was recovering somewhat. Around 10 a.m., the registered share fell by 0.9% to 69.70 francs, while the SPI index stagnated around -0.07%.

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