Cembra Money Bank (CMBN) H2 2023 earnings summary

Executive summary

• FY 2023 net income was CHF 158.0m, down 7% YoY; H2 net income was CHF 83.0m, up 5%. Net revenues rose 1% to CHF 515.7m.

• Selective receivables growth, higher fee income and a 0.8% loss rate supported results amid higher funding costs and strategic investment.

• Card migration and BNPL integration advanced alongside a simplified Lending and Payments structure; mid-term targets were confirmed.

Financial highlights

• Net interest income fell 3% to CHF 347.2m as interest expense increased to CHF 74.9m from CHF 29.4m; commission and fee income rose 10% to CHF 168.5m.

• Provisions for losses rose to CHF 56.9m from CHF 40.9m; operating expenses increased 2% to CHF 262.6m.

• Income before tax was CHF 196.2m versus CHF 210.5m; net income was CHF 158.0m versus CHF 169.3m.

• Basic EPS was CHF 5.39 versus CHF 5.77; diluted EPS was CHF 5.38 versus CHF 5.76.

Outlook and guidance

• 2024 net revenues are expected to moderately outpace Swiss GDP growth; net interest margin is expected to increase slightly, cost/income ratio to remain below 49%, and ROE to reach 13%–14%.

• H2 2024 is expected to be stronger than H1, assuming continued slight Swiss economic growth; increased net income is forecast.

• Mid-term targets include financing receivables growth of 1%–3% p.a., loss rate ≤1%, Tier 1 ratio >17%, and cost/income ratio <39% by 2026.

• ROE target is ≥15% in 2025–26; cumulative EPS growth target is 20%–30% from 2021 to 2026, with increasing dividends in 2024–26.

• Mid-term NIM is expected to rebound to ~5.5%; one-off personnel costs of CHF 3m–5m are expected in 2024.