Cembra Money Bank AG
 
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Cembra Money Bank comments on Federal Council’s decision to reduce the maximum interest rate for consumer loans

 

Zurich, Switzerland – The Federal Council decided on 11 December 2015 to reduce the maximum interest rate on consumer loans offered under the Consumer Credit Act (CCA) from 15% to 10% (3-months LIBOR plus 10% surcharge); the respective maximum interest rate for credit card overdraft will be reduced to 12%. The decision will come into force as of 1 July 2016 for all new contracts entered thereafter. Contracts entered before 1 July 2016 will not be affected. This decision is likely to lead to a restriction of access to credit for some customers due to the risk based pricing approach applied by Cembra Money Bank (the ‘Bank’).

 

The reduction of the maximum interest rate will have no impact on the results for the current financial year 2015. Therefore, the Bank is expecting reported earnings per share of between CHF 4.70 and CHF 4.90 for 2015 as announced previously.

 

In order to mitigate the potential consequences, the Bank has defined a set of measures which will be introduced in the short and medium term. Taking into account these measures as well as the average contract duration of approximately three years on products affected by the CCA regulation, it is expected that the impact for the business year 2016 will be limited. Based on current information, and assuming all other things remain equal, it will, however, have on a like for like basis compared to the mid-point of the 2015 earnings per share (EPS) guidance range (CHF 4.80) an estimated negative impact on EPS of 10% or CHF 0.47 respectively, when fully phased in over the next 36 months. The Bank will seek, through other business initiatives, to further mitigate this negative impact.

 

In that context, and given the solid capital position of the Bank and the continuous buildup of excess capital above the tier 1 minimum target of 18%, the Board of Directors will reassess if necessary its pay-out target range in due course in order to ensure a sustainable dividend policy.

 

Contacts

 

Media:

Andreas Werz; +41 44 439 8512; andreas.werz@cembra.ch

Investor Relations:

Christian Waelti; +41 44 439 8572; christian.waelti@cembra.ch

 

 

Key dates

 

23 February 2016

24 March 2016

Presentation of full-year results 2015

Publication of the Annual Report 2015

27 April 2016

General Meeting 2016

 

 

Cembra Money Bank AG

Cembra Money Bank AG is one of the leading Swiss providers of financial products and services. Its product range includes personal loans, auto leases and loans, credit cards and insurance sold with those products as well as deposit and savings products.
Headquartered in Zurich-Altstetten, the Bank has operations across Switzerland via a network of 25 branches as well as alternative sales channels such as the Internet, credit card partners, independent agents and more than 3,200 car dealers.
Cembra Money Bank AG is an independent Swiss bank and has been listed on the SIX Swiss Exchange since October 2013. It has over 700 employees from more than 40 nations and almost 700,000 customers.