Cembra Money Bank reports half-year net income of CHF 69.6 million up 8 % and increases full-year 2015 guidance

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1 Cembra Money Bank reports half-year net income of CHF 69.6 million up 8 % and increases full-year 2015 guidance Net financing receivables up 1 % to CHF 4.1 billion Earnings per share increase 10 % to CHF 2.37 Return on equity of 17.7 % on strong capital base with Tier 1 ratio of 18.7 % Costs well controlled reflected in low cost/income ratio of 42.8 % Full-year 2015 guidance increased to between CHF 4.70 and CHF 4.90 per share Zurich, Switzerland Cembra Money Bank reports for the first half-year 2015 an 8 % increase in consolidated net income to CHF 69.6 million or CHF 2.37 per share1. This reflects an annualised return on average shareholders equity2 of 17.7 % while maintaining a strong capital position with a Tier 1 capital ratio3 of 18.7 % after the CHF 100 million share buyback executed in May Costs remained well under control as demonstrated by the solid cost/income ratio4 of 42.8 %. With net financing receivables growing by 1 % to CHF 4.1 billion, Cembra Money Bank was able to outperform Swiss GDP growth. Robert Oudmayer, Chief Executive Officer, said: In a challenging environment, we showed excellent net income growth. We also managed to deliver on our medium term targets. Furthermore, our business transition from GE is well on track. Growing commission and fee income combined with rigorous cost and risk management Compared to first half 2014, net revenues increased by 2 % to CHF million. Net interest income, which accounts for 77 % of net revenues, was down 1 % at CHF million, reflecting a net interest margin5 of 7.1 %. Interest income was down 1 % driven by costs of approximately CHF 1.5 million for cash held at the Swiss National Bank (SNB). Interest expense was down 3 % on favorable repricing of the Bank s liabilities. Commissions and fee income, which contributes 23 % to net revenues, was 15 % higher at CHF 43.0 million, mainly driven by a 26 % increase in credit cards fee income. Provisions for losses came in at CHF 20.8 million translating into a loss rate6 of 1.0 % of financing receivables which is in-line with the guidance provided. Cembra Money Bank s prudent risk management approach was reflected in stable delinquencies at low levels: 2.0 % for 30+ days past due7 and 0.5 % for non-performing loans8. Total operating expenses were 2 % lower at CHF 81.4 million. While personnel expenses increased by 2 % to CHF 48.8 million as a result of higher pension cost, general and administrative expenses of CHF 32.5 million were 6 % lower. This decrease is mainly attributable to timing effects related to the ongoing IT transition. General and administrative expenses also included CHF 3.4 million Swiss issuance stamp tax in connection with the sale of 9.5 million Cembra Money Bank shares by General Electric Company in May This resulted in a solid cost/income ratio of 42.8 %. Income before taxes increased by 7 % to CHF 88.1 million while the tax rate remained unchanged at approximately 21%. This led to a net income of CHF 69.6 million representing an increase of 8 % compared to first half Cembra Money Bank AG Bändliweg Zurich Tel

2 Substantial inflows from institutional and retail depositors Cembra Money Bank recorded substantial inflows in institutional and retail deposits which grew by 11 % to CHF 2,163 million and made up for 55 % of total funding in June. In March, the Bank successfully executed its third auto asset backed security (ABS) transaction of CHF 200 million with maturity of four years at favorable conditions. The cash on the balance sheet of CHF 534 million (down 14 % compared to year-end 2014) was almost entirely at SNB. Shareholders equity decreased 13 % to CHF 736 million as a result of the CHF 100 million share buyback and the CHF 93 million dividend payment. With risk-weighted assets of CHF 3,730 million (up 1 % versus year-end 2014) and eligible Tier 1 capital of CHF 699 million, the Tier 1 capital ratio reached a strong 18.7 % by end-june Antoine Boublil, Chief Financial Officer, commented: We are tracking ahead of our funding plan with a strong growth in deposits, which enabled us to complete the repayment of our IPO syndicate loan and of CHF 200 million of GE funding, both executed in July Besides, following our share buyback in May, we accumulated CHF 27 million of excess capital as of the end of June. Growth in net financing receivables driven by credit cards In an again slightly decreasing market, Personal loans was able to consolidate its strong market position keeping receivables almost flat at CHF 1,840 million. Interest income was 2 % lower at CHF million compared to first half As of 1 July 2015, the branch and agent operations have been reorganized and divided into regions to serve clients more efficiently. The revaluation of the Swiss Franc had a significant impact on the Swiss auto market. While new car registrations benefited from lower import prices, used car transactions in Switzerland were flat in the first six months of Net financing receivables increased slightly to CHF 1,668 million and interest income fell by 2 % to CHF 42.9 million as a result of lower rates offered in the market, compared to first half Credit cards again recorded strong growth with net financing receivables increasing by 7 % to CHF 595 million compared to year-end Interest income of CHF 21.8 million was 17 % higher than in the corresponding period All credit card programs contributed to the 3 % increase in the number of issued cards to 626,000 (compared to year-end 2014). Increasing full-year 2015 guidance Given the seasonality in Cembra Money Bank s business and assuming no major change in the economic environment, net revenue for the second half-year 2015 should exceed first half-year net revenue. Funding costs are expected to benefit from the repayment of loans signed at the time of the IPO and the low interest rate environment. At the same time, due to the scheduled completion of the business transition, IT related operating expenses will increase compared to the first half of the year. Based on these factors, Cembra Money Bank increases its full-year 2015 guidance and is expecting reported earnings per share of between CHF 4.70 and CHF Cembra Money Bank AG Bändliweg Zurich Tel

3 Organisational change to the Board of Directors Prof. Dr. Peter Athanas, member of the Board of Directors and Chairman of the Audit Committee, has been elected by the Board of Directors as a member of the Compensation and Nomination Committee. He will replace Richard Laxer, who has announced his retirement from the Board of Directors effective 1 September All documents (half-year report 2015, investor presentation, letter to shareholders and this media release) are available at Contacts Media: Andreas Werz; +41 (0) ; andreas.werz@cembra.ch Investor Relations: Christian Waelti; +41 (0) ; christian.waelti@cembra.ch Key dates 22 February 2016 Publication of full-year 2015 results 24 March 2016 Publication of the Annual Report April 2016 Annual General Meeting 2016 Audio webcast and telephone conference for investors/analysts (in English) Date and time: at a.m. CET Speakers: Robert Oudmayer (CEO), Antoine Boublil (CFO) Audio webcast: Telephone: Europe: +41 (0) UK: +44 (0) US: +1 (1) Q&A session: Following the presentation participants will have the opportunity to ask questions via the telephone conference. Please dial in minutes before the start of the presentation and ask for Cembra s half-year 2015 results. Cembra Money Bank AG Bändliweg Zurich Tel

4 About Cembra Money Bank Cembra Money Bank is a Bank with a well-established position in Swiss consumer finance. The Bank is regulated by FINMA, holds a banking license and provides a range of financial products and services. The Bank holds leading positions in Switzerland for its Personal Loans and Auto business. It has a growing Credit Cards business based on partnering with Swiss retailers and other institutions. Headquartered in Zurich, the Bank operates exclusively in Switzerland through a nationwide network of 25 branches as well as through alternative distribution and sourcing channels, such as the internet, credit card partners, independent agents and over 3,200 auto dealers. Explanatory notes 1 Basic earnings per share based on weighted-average numbers of common shares outstanding. 2 The annualised return on average shareholders equity is defined as the ratio of net income to average total shareholders equity (2-point average). 3 Tier 1 capital ratio: this means the ratio (expressed as a percentage) of the Bank s consolidated Tier 1 capital (CET1) to the Bank s consolidated riskweighted assets as at 30 June The Bank s consolidated Tier 1 capital as well as the risk-weighted assets have been derived from the Banks s statutory consolidated financial statements as at 30 June 2015, which were prepared in accordance with Swiss law, and calculated in accordance with applicable Swiss regulatory requirements. 4 The cost/income ratio is defined as the ratio of total operating expenses to net revenues. 5 The net interest margin is defined as the ratio of net interest income to average financing receivables (net of deferred income and costs and before allowance for losses; 2-point average). 6 The loss rate is defined as the ratio of provision for losses on financing receivables to average financing receivables (net of deferred income and costs and before allowance for losses; 2-point average). 7 This ratio represents the Bank s 30+ days past due balances divided by the financing receivables (excluding initial direct costs). 8 The non-performing loans (NPL) ratio is defined as the ratio of nonaccrual interest-bearing assets (at period-end) to interest-bearing assets. 9 Based on an estimated weighted-average numbers of shares outstanding of about 28,800,000 for Disclaimer regarding forward-looking statements This media release by Cembra Money Bank ( the Bank ) includes forward-looking statements that reflect the Bank s intentions, beliefs or current expectations and projections about the Bank s future results of operations, financial condition, liquidity, performance, prospects, strategies, opportunities and the industries in which it operates. Forward-looking statements involve matters that are not historical facts. The Bank has tried to identify those forward-looking statements by using the words may, will, would, should, expect, intend, estimate, anticipate, project, believe, seek, plan, predict, continue and similar expressions. Such statements are made on the basis of assumptions and expectations which, although the Bank believes them to be reasonable at this time, may prove to be erroneous. These forward-looking statements are subject to risks, uncertainties and assumptions and other factors that could cause the Bank s actual results of operations, financial condition, liquidity, performance, prospects or opportunities, as well as those of the markets it serves or intends to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. Important factors that could cause those differences include, but are not limited to: changing business or other market conditions; legislative, fiscal and regulatory developments; general economic conditions in Switzerland, the European Union and elsewhere; and the Bank s ability to respond to trends in the financial services industry. Additional factors could cause actual results, performance or achievements to differ materially. In view of these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements. The Bank, its directors, officers and employees expressly disclaim any obligation or undertaking to release any update of or revisions to any forwards-looking statements in this media release and any change in the Bank s expectations or any change in events, conditions or circumstances on which these forward-looking statements are based, except as required by applicable law or regulation. Cembra Money Bank AG Bändliweg Zurich Tel

5 Consolidated Statements of Income (unaudited) For the six months ended (CHF in millions) 30 June June 2014 Change in % Interest income % Personal loans % Auto leases and loans % Credit cards % Other Interest expense % Net interest income % Commission and fee income % Insurance % Credit cards % Personal loans and other % Net revenues % Provision for losses on financing receivables % Compensation and benefits % General and administrative expenses % GECC assessment / TSA % Professional services % Marketing % Collection fees % Postage and stationery % Rental expense under operating leases % Depreciation and amortisation % Information Technology % Other % Total operating expenses % Income before income taxes % Income tax expense % Net income % For the six months ended (in CHF) 30 June June 2014 Change in % Earnings per share Basic % Diluted % Cembra Money Bank AG Bändliweg Zurich Tel

6 Consolidated Statements of Financial Position (unaudited) As at (CHF in millions) 30 June December 2014 Change in % ASSETS Cash and cash equivalents % Financing receivables, net 4, , % Personal loans 1, , % Auto leases and loans 1, , % Credit cards % Property, plant and equipment, net % Intangible assets, net % Other assets % Deferred income taxes % Total assets 4, , % LIABILITIES AND EQUITY Deposits 2, , % Accrued expenses and other payables % Due to affiliates % Short-term debt Long-term debt 1, , % Other liabilities % Total liabilities 4, , % Common shares % Additional paid in capital (APIC) % Treasury shares ,113 % Retained earnings % Accumulated other comprehensive loss (AOCI) % Total shareholders' equity % Total liabilities and shareholders' equity 4, , % Cembra Money Bank AG Bändliweg Zurich Tel

7 Key Figures (unaudited) For the six months ended Earnings per share Net income attributable to shareholders (CHF in millions) Weighted-average numbers of common shares outstanding for basic earnings per share 29,425,900 29,960,795 Weighted-average numbers of common shares outstanding for diluted earnings per share 29,459,585 29,993,044 Basic earnings per share (in CHF) Diluted earnings per share (in CHF) Ratios Return on average shareholders' equity (ROE in %) 17.7 % 16.4 % Return on average assets (ROA in %) 2.9 % 2.8 % Cost / income ratio (in %) 42.8 % 44.5 % Net interest margin (in %) 7.1 % 7.2 % Loss rate (in %) 1.0 % 1.0 % As at Capital adequacy Risk-weighted assets (CHF in millions) 3,730 3,689 Core Tier 1 capital (CHF in millions) Tier 1 capital ratio (in %) 18.7 % 20.6 % Share Share price (in CHF) Market capitalisation (CHF in millions) 1,710 1,650 Headcount and credit rating Employees (full-time equivalent) Credit rating (S&P) A A Cembra Money Bank AG Bändliweg Zurich Tel