The amount of the redistribution to shareholders corresponds to a payout rate of 70% of the net profit. The latter swelled by 6% to 161.5 million francs in 2021.
Cembra Money Bank will raise its dividend for the 2021 financial year. The consumer credit specialist and card issuer will pay its shareholders 3.85 francs per share, he announced on Wednesday.
The amount of the redistribution to shareholders corresponds to a payout rate of 70% of the net profit. The latter swelled by 6% to 161.5 million francs in 2021.
“While the end of the partnership with Migros is certainly a setback, we have been able to win new partners in the credit card and deferred payment sector”, welcomed Holger Laubenthal, Managing Director.
Net income fell 2% to 487 million, due to lower interest income (-5%).
But in commission activities, revenue was up 7% to 130.3 million. The subsidiary Swissbilling, which specializes in deferred payment, has implemented a solution for Ikea and other partners, resulting in a jump in commissions of 23% to 11 million francs.
Expenses fell slightly to 246.3 million.
As expected
The annual results are in line with analysts’ forecasts, and the dividend is higher than the 3.75 francs expected.
The credit loss rate was 0.6% following the release of provisions for losses, following the sale of a portfolio of receivables, or 0.8% adjusted for this one-time effect. The return on equity stood at 13.9%, while the Tier1 ratio reached 18.9%.
Customer receivables reached 6.2 billion at the end of December, down 1% compared to the same period a year earlier.
In private credit activities, receivables fell by 5% to 2.5 billion. Weaker demand due to the pandemic as well as Cembra’s cautious stance in new business are behind this decline.
Auto financing receivables rose 1% to 2.8 billion, while credit card receivables jumped 6% to 1.0 billion. Business was supported by higher transaction volume and a 4% increase in cards issued.
For the period 2022-2026, Cembra aims to achieve a return on equity (ROE) of 13-14% for 2022 and 2023, expecting a “robust” evolution of the activities. From 2024, it should exceed 15%.
If the results are not surprising, the key figures having been presented at the beginning of December, the increase in the dividend constitutes a good surprise and a sign of confidence, believe analysts at Vontobel.
