On August 23, 2021, the shareholders of Cembra Money Bank experienced a "Black Monday". The Mid Cap slumped by a good 30% within one trading session. Prior to this, the Zurich-based company had announced the end of its cooperation with Migros. After 15 years, the cooperation agreement for the Cumulus Mastercard was to expire. The retailer planned to enter this business together with the in-house Migros Bank. Although Cembra Money Bank's management maintained the outlook for 2021 as well as the medium-term targets, the end of the cooperation with Migros was expected to "temporarily" reduce net profit by 10% to 15% from 2022 onwards. In the meantime, the separation has been completed, and since July 1, the long-standing partners have been going their separate ways. At the same time, an intense battle for the "Cumulus community" has broken out. According to Cembra Money Bank, more than 850,000 of this popular credit card were in circulation last August.
With "Certo!", a new credit card family, Cembra wants to keep these users in line. The service provider has launched two variants of this, one "for everyone" and another "for existing users of the Cumulus Mastercard," according to the company. The first Cumulus holders are expected to receive their new cards in the coming weeks. The data, including PIN, will remain unchanged. In addition, the new offer provides a cashback of 1% for purchases at Migros, Coop and SBB. "All other transactions are rewarded with a cashback of 0.33%," Cembra states in a media release. Of course, Migros Bank also wants to keep as many customers as possible. It has launched a new Cumulus credit card at the same time as its competitor. In addition to worldwide purchases free of charge, the provider highlights, among other things, the waiver of the annual fee and a free cash withdrawal at Migros checkouts as plus points.
Cembra is not relying solely on the recently launched credit card family. As part of a strategy issued at the end of 2021, CEO Holger Laubenthal also wants to seize new growth opportunities. He has his eye on the "Buy Now Pay Later" (BNPL) segment in particular. The financial institution offers invoice financing through its subsidiary Swissbilling, which was founded in 2011. Customers here include the furniture store Ikea Switzerland and the sports retailer Ochsner. In 2021, Swissbilling said it processed 1 million invoices and increased fee income by 23% to CHF 11 million. Investors will find out how this young business and the entire group have fared so far this year on July 21. That's when Cembra Money Bank presents its results for the first half of 2022. At the same time, analyst consensus for the SMIM member comes under scrutiny. So far, the experts trust the company - despite the Migros separation and the profit losses announced in the wake of it - to achieve a stable surplus in 2022. Last year, Money Cembra Money Bank posted a record bottom line of CHF 161.5 million (see chart).
On the stock market, a decent chunk separates the credit specialist from its historical peaks. After the sell-off last summer, the Cembra share has entered a sideways trend. A continuation of this chart constellation would be made for the new Softcallable Barrier Reverse Convertible (BRC). Irrespective of the further share price development, investors will receive a quarterly coupon payment of 7% p.a.. Cembra Money Bank starts the maximum term of 18 months with a barrier of 65% of the initial level. As long as the underlying does not fall to or below this price level, the issuer repays the nominal in full. If, on the other hand, the cushion is not sufficient, the partial protection expires. The investment would then be linked to the performance of the stock. Please also note: Due to the soft callable feature, early termination and redemption of this CHF issue may occur.
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