In This Article:
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Net Income: CHF 170.4 million, up 8%.
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Net Revenue: CHF 550 million, up 7%.
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Net Interest Margin: Improved to 5.6% from 5.2%.
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Cost/Income Ratio: Reduced to 48.1%.
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Loss Rate: 1.1%, in line with long-term trend.
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Dividend: Proposed increase of 6% to CHF 4.25 per share.
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Net Financing Receivables: CHF 6.6 billion, with a 1% decrease.
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Operating Expense: Increased by 1% to CHF 264.5 million.
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Personnel Expense: Declined by 2% to CHF 134.8 million.
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Number of FTEs: Decreased by 90 to 812.
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Retail Deposits: Increased by CHF 451 million.
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Tier 1 Ratio: 17.9%.
Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Cembra Money Bank AG (XSWX:CMBN) reported a substantial increase in net income and net revenues, up 8% and 7% respectively, driven by a strong rebound in the net interest margin.
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The company successfully reduced its cost/income ratio to 48.1%, with a strong performance in the second half of the year, keeping it on track for its 2026 target.
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Cembra Money Bank AG (XSWX:CMBN) proposed a dividend increase of 6% to CHF4.25, reflecting confidence in the sustainability of its earnings and strong capital position.
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The transformation initiatives, including a new auto platform and digital savings products, have significantly improved productivity and customer engagement.
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The company maintained a strong Tier 1 capital ratio of 17.9%, indicating a robust capital position.
Negative Points
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The net financing receivables decreased by 1%, primarily due to a 4% drop in personal loans, reflecting a selective underwriting approach in a softened economic environment.
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Operating expenses increased by 1% to CHF264.5 million, with restructuring costs and strategic investments offsetting initial cost savings from transformation initiatives.
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The loss rate increased to 1.1%, slightly above the long-term trend, with a one-off benefit of CHF6.7 million affecting the loss provision for 2024.
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Credit card net financing receivables decreased by 2%, although adjusted for calendar effects, the card assets remained stable.
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The company faces potential pressure on net interest margins due to changes in interest rate caps and a focus on lower-risk exposures, which may impact yield in personal loans and credit cards.
Q & A Highlights
Q: Can you clarify if the net interest margin is expected to stabilize at 5.6% in 2025, or at a slightly higher level? A: The net interest margin is expected to stabilize at the current level of around 5.6% in 2025. This is due to successful repricing, changes in interest rate caps, and a focus on high-quality assets, which may result in some segments having lower prices.