Cembra Money Bank's profit idled on the year, leading the Swiss consumer lender to flag a similar dividend to 2018. It is looking to online financing for smaller firms for a fillip.
Cembra's net profit rose 1 percent to 78.6 million Swiss francs ($80 million), the consumer credit specialist said in a statement on Tuesday. More automotive leasing and growth in credit cards underpinned a 5 percent rise in revenue to 222.6 million francs. The Swiss bank intends to pay a dividend of at least 3.75 francs per share, which was 2018's payout.
Spending surged 14 percent to 103.6 million francs, largely due to Cembra's addition of 71 jobs in the last 12 months. The 10 percent expansion of its workforce drove spending on personnel up 8 percent to 56.9 million francs.
Dozens of New Jobs
Costs rose elsewhere too, mainly due to Cembra spending on investments in information technology and on growth initiatives, as well as ahead of its acquisition earlier this month of Cashgate, a credit rival. Cembra's cost-income ratio spiked to 46.5 percent, from 42.6 percent year-ago.
Cembra stowed 20 percent less – 19.2 million francs – against future loan losses, thanks to a buoyant economy and a one-time benefit from syncing its write-offs and debt collection process. The metric translates to a loss rate of 0.8 percent – a dream measure, illustrating loan losses remain low with budget-conscious Swiss consumers (by comparison, banks in western Europe factor 1.3 percent for loan loss impairments according to McKinsey).
Cashgate Deal
Cembra said it wants to expand into online financing for small business in Switzerland. It inked a tie-up with Spotcap, a Berlin-based fintech start-up, on a new tech platform. The new offering will go online in the fourth quarter, Cembra said.
The small business initiative as well as exploiting growth through Cashgate are its two priorities for the second half, CEO Robert Oudmayer said. Cembra snapped up Cashgate from Aduno for 277 million francs four weeks ago, in a consolidation of consumer lending in the alpine nation.
