Cembra Bank and Migros, Switzerland's largest retailer, are ending a 15-year-old partnership for credit cards. The move represents a dramatic setback for the Swiss consumer lender.

Cembra and Migros are ending their cooperation over credit cards next June, the two firms said in a join statement on Monday. Migros, the largest Swiss retailer by revenue, plans to issue its own credit card.

This is a major blow for Cembra, where roughly 85 percent of credit cards issued are emblazoned with the distinctive logo of Migros' «Cumulus» points program. The Zurich-based lender said it expects revenue to drop ten to 15 percent in 2022 as a result of the break-up, and that it plans to compensate the shortfall through «appropriate measures» further out.

Retailer Pushes Into Cards

Cembra booked 75 million Swiss francs ($82 million) in revenue from credit cards in the first half, of its total 236 million franc turnover in the period. The bank, which went public eight years ago, held fast to its targets, including return on equity of at least 15 percent and to pay out up to 70 percent of its profits as dividends to investors.

As for Migros, it plans to issue the Cumulus credit cards through its house bank from next July. It has buried plans to launch a free debt card with Cembra, opting instead to partner with Viseca, a collective of cantonal and regional banks in which Migros is also represented.