Consumer Bank Cembra Books Record Profits
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Swiss consumer lending specialist Cembra Money Bank posted record profits last year. The credit card business in particular grew.
Cembra’s net income increased 6 percent to 161.5 million Swiss francs in 2021, even though revenues decreased 2 percent to 487.0 million Swiss francs, the bank said Wednesday in announcing its annual results.
CEO Holger Laubenthal said the robust development in all business areas and our excellent loss ratio enable us to report a record profit in a challenging environment. Moreover, Cembra also won new partners in the credit card and Buy Now Pay Later areas, he added.
Interest income declined 5 percent due to a lower receivables base in the personal loans business, while at the same time interest expenses decreased by 3 percent to 26 million Swiss francs.
Total net loans and advances to customers at the end of 2021 amounted to 6.2 billion Swiss francs, a decrease of 1 percent compared with the previous year. In personal loans, receivables decreased by 5 percent to 2.5 billion Swiss francs, while vehicle financing decreased 1 percent to 2.8 billion Swiss francs.
The impact of the Covid 19 pandemic in Switzerland and the cautious underwriting policy in new business, were cited as factors.
Receivables in the credit card business increased by 6 percent to 1.0 billion Swiss francs, boosted by an increase in card issuance of 4 percent year-on-year to 1.07 million.
The Board of Directors will propose a 3 percent dividend per share increase to 3.85 Swiss francs at its next General Meeting on April 21.
The main shareholders are UBS Fund Management which owns at least 5 percent, followed by Blackrock, Credit Suisse Funds and Swisscanto which each own at least 3 percent of Cembra, according to its website.
Questions & Answers
Q.How did Cembra manage to achieve record profits despite a fall in overall revenues?
How did Cembra manage to achieve record profits despite a fall in overall revenues?
Cembra's net income increased by 6 percent, even though revenues fell by 2 percent. This was attributed to robust development across all business areas and an excellent loss ratio, allowing for record profits in a challenging environment.
Q.What caused the decline in interest income for Cembra last year?
What caused the decline in interest income for Cembra last year?
Interest income declined by 5 percent. This was primarily due to a lower receivables base within the personal loans business. Concurrently, interest expenses decreased by 3 percent.
Q.Which areas of Cembra's lending business experienced a decrease in receivables?
Which areas of Cembra's lending business experienced a decrease in receivables?
Receivables in personal loans decreased by 5 percent to 2.5 billion Swiss francs, and vehicle financing saw a 1 percent decrease, reaching 2.8 billion Swiss francs. The pandemic and cautious underwriting policies were factors.
Q.Which of Cembra's main business areas showed growth in receivables last year?
Which of Cembra's main business areas showed growth in receivables last year?
The credit card business was the only area specifically noted for growth, with receivables increasing by 6 percent to 1.0 billion Swiss francs. This was boosted by a 4 percent rise in card issuance.
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