Full Year 2024 Cembra Money Bank AG Earnings Call Transcript
Key Points
- Cembra Money Bank AG (XSWX:CMBN) reported a substantial increase in net income and net revenues, up 8% and 7% respectively, driven by a strong rebound in the net interest margin.
- The company successfully reduced its cost/income ratio to 48.1%, with a strong performance in the second half of the year, keeping it on track for its 2026 target.
- Cembra Money Bank AG (XSWX:CMBN) proposed a dividend increase of 6% to CHF4.25, reflecting confidence in the sustainability of its earnings and strong capital position.
- The transformation initiatives, including a new auto platform and digital savings products, have significantly improved productivity and customer engagement.
- The company maintained a strong Tier 1 capital ratio of 17.9%, indicating a robust capital position.
- The net financing receivables decreased by 1%, primarily due to a 4% drop in personal loans, reflecting a selective underwriting approach in a softened economic environment.
- Operating expenses increased by 1% to CHF264.5 million, with restructuring costs and strategic investments offsetting initial cost savings from transformation initiatives.
- The loss rate increased to 1.1%, slightly above the long-term trend, with a one-off benefit of CHF6.7 million affecting the loss provision for 2024.
- Credit card net financing receivables decreased by 2%, although adjusted for calendar effects, the card assets remained stable.
- The company faces potential pressure on net interest margins due to changes in interest rate caps and a focus on lower-risk exposures, which may impact yield in personal loans and credit cards.
Good morning, everyone. Thank you for joining us this morning. It's great to be here for the presentation of our full year results for 2024. I'm here with our CFO, Pascal Perritaz; our CRO, Volker Gloe. And as usual, look forward to walking you through the presentation, and then we'll take your questions.
So let me start on the first page with the key messages. So we're two-thirds roughly into our '22 to '26 strategy, and we're pleased with the continued execution that has allowed us to deliver record results last year. First, net income and net revenues were up substantially at 8% and 7%, respectively, driven in part by strong rebound of the net interest margin. Second, we're happy, and like that revenue comes -- revenue growth comes from both business lines, particularly strong in Payments. Next and importantly, we're seeing real intangible benefits from our transformation, and this is both visible in terms of our product suite and resulting customer benefits as well as -- and this is the fourth
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