Cembra Money Bank Aktie

Ladies and gentlemen, welcome to the Half Year Results 2026 Conference Call and Live Webcast. My name is Yusof, the Chorus Call operator. [Operator Instructions] This conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or for broadcast.

At this time, it's my pleasure to hand over to Mr. Holger Laubenthal, CEO. Please go ahead.

Thank you, Yusof, and good morning, everyone. Great to be here for the presentation of our first half 2026 results. I'm here with our CFO, Christoph Glaser; CRO, Volker Gloe, and we look forward to walk you through the slides and then to your questions.

Key messages we have for you this morning for the first half. So first, given continued strategy execution, we achieved a solid 6% growth in net income, it's primarily due to further efficiencies from our transformation program. Second, we're pleased with receivables growth of 2% from across business units, including personal loans. Net revenues remained stable despite lower maximum interest rates.

Strong improvement in cost/income ratio by over 4 points to 43.5%, and loss performance continued solid and aligned with the guidance that we've given. Overall, this delivered a strong capital position of 17.7%. And with that, we're also pleased to confirm our full year guidance we have provided based on the core performance excluding this next point.

Now, we're really excited to announce our acquisition of Santander's auto financing business in Switzerland. We look at it as a strike one opportunity for us. Transaction is well aligned with our strategy, further strengthens and expands our presence in Switzerland. We'll have more on this later, but we expect this transaction to be EPS accretive next year with resulting ROE improvement from 2028 onwards. And again, Christoph, with more details on this later.

So a few key highlights here on the first half. Net income came in at CHF 92.3 million, up 6%. As I said, we're pleased with financing receivables growth. And as I mentioned, flat revenues against the backdrop of lower interest rates. Strong continued progress with our operational excellence program leads to reduction of cost/income ratio to 43.5%, losses in line with guidance, ROE increase of 30 bps and overall delivering strong Tier 1 capital ratio.

Just zooming in quickly here on the specific segments in our market. Personal loans, we see nice rebound here given focused growth initiatives with that slightly ahead of the market. Auto is up as well in receivables, continued positive momentum, again, leveraging our new platform and further increasing automation in these processes.

Good results in cards in terms of receivables growth, and buy now pay later continued focus on profitability, invoices up 12%, volume down based on mix and portfolio management.

So next page, just a few words on our continued benefits from strategy delivery. It illustrates continued focus and execution across programs. We're increasing penetration in our app. We've got more products live simpler, more automated interaction for increasing customer value.

With the auto platform, we're pleased with further automation here and particularly straight-through processing significantly increase, which makes us faster, more efficient and again, significant value for our partners and customers.

We've also introduced a number of add-on products in our app that makes them more intuitive, more relevant offerings, and we're seeing strong conversion increase on those products.

Last not least, driving accelerated AI adoption, both in customer interaction as well as related analytics for faster and more efficient servicing going forward.

So with that, let me hand over to Christoph to -- for a closer look at the financials.

Thank you, Holger, and welcome, everyone. It's a privilege to join you on this call following my arrival in spring. As Holger already mentioned, we have delivered CHF 92.3 million of net income and CHF 3.15 of EPS, which represents a 6% year-over-year growth.

Our net revenues are stable despite lower maximum interest rates and a softened macro environment. Our provisions for losses are back to normal levels, and Volker will provide more details on that in a moment.

The substantial decrease of our operating expense shows once again our continued commitment to manage the company efficiently. NIM is stable at 5.4%. Our cost/income ratio substantially improved to 43.5%. Our ROE improved to 14.1% and our ROA to 2.4%.

Now with that, let's take a quick look at net financing receivables and yields, which shape our interest income. Firstly, and as Holger has already mentioned, it is important to note that we have grown net financing receivables across all product lines. We have managed to reinitiate growth of our P loan receivables base following moderate declines in the past.

We have also managed to contain the impact of reduced maximum rate levels and yields, keeping them broadly stable or at mildly lower levels like for instance, in the case of P loans.

Now that said, we would like to reiterate that we are focused on the management of our NIM and the related guidance, which takes me to the next page.

Our NIM has been kept stable at 5.4%. We had to digest CHF 5.7 million of negative pricing impact related to lower maximum interest rates, and CHF 0.8 million of lower income from cash and cash equivalents. And we've managed to compensate this challenge entirely by reducing cost of funds, taking both price and mix actions. We intend to keep NIM at 5.4% as we go through the year.

With that, I would like to ask Volker to cover the next topic, provisions for losses.

Yes. Thanks, Christoph. For the first half of '26, the loss provisions came in at CHF 36.2 million or translated into a loss rate at 1.1%. This is slightly higher than in the same period last year when we reported 0.9%. I want to remind us that in the last year's number, we had this effect of the previously described synchronization of collections and write-off procedures that impacted the loss rate.

So if one would normalize for this temporary effect, the comparison year-over-year would rather show stability at an around 1% level. We also see now the expected stabilization of delinquency and NPL numbers. These metrics were also affected by the mentioned synchronization, and now the level of stability is reached. Both the 30-plus delinquencies and the NPLs have actually slightly improved when looking into a year-over-year comparison and comparing to last year's numbers. So they came in at 3.3% for 30-plus delinquencies and 1.7% for NPLs, respectively.

We show on the upper right on the page, the adjusted NPL number as well. This enables the comparison over the longer term and is excluding these synchronization effects. And you again can see that the underlying asset quality has actually not materially moved.

Our calibration of this triangle of risk price and volume to optimize profitability has continued. We allowed in the first half of '26, slightly more credit risk on the book. Therefore, the credit grade distribution shows also a lower portion of CR1 and CR2 volumes compared to the previous period.

Nonetheless, we feel comfortable with the risk that we have been taking here as we do it in a prudent way as always, and the underlying performance remains solid. And it has been, and we have been seeing that on the previous pages, rewarded by asset growth and also a constant NIM.

As we continue to stay diligent in our risk taking, we would also not change the outlook for the full year. We still expect a loss rate around 1%. Though I have to add that this is the pre-transaction expectation. The transaction itself increases the auto financing receivables and auto leasing assets have an attractive risk profile. But there is a certain one-off effect related to loss accounting under U.S. GAAP.

Consequently, including the transaction and hence, also including the one-off effect, we would foresee a loss performance for 2026. That is slightly above our midterm target of around 1%.

And with that, I hand it back to Christoph.

Thank you, Volker. Now disciplined risk management and prudent loss income trade-offs are part of our DNA as much as disciplined cost and prudent cost/income trade-offs.

In the first half of '26, our OpEx amounted to CHF 116 million, i.e., CHF 11 million less than in the first half of '25, reducing our cost/income ratio from 47.6% to 43.5%. We managed to reduce OpEx across almost all categories of spend. Our FTE number has dropped from 805 to 744 as of June '26.

Now let's take a bit of a longer-term look at our OpEx performance on the next slide. Firstly, and as Holger already mentioned at the beginning of the presentation, there are benefits from the transformation we started a couple of years ago, and we continue to drive that transformation as we go through 2026.

The number of group employees has dropped from 877 in mid-'24 to 805 in mid-'25 and to 744 over time.

Our operating expenses have dropped from a level of CHF 265 million in '24 to CHF 245 million in '25. And now looking at 2026, we expect to spend no more than CHF 228 million to CHF 230 million. We does expect inherently a cost reduction of CHF 15 million or more in 2026 and the cost/income ratio run rate in the second half of 2026 below 40%.

Now let's turn to the balance sheet before we cover funding and capital. With regard to the asset side, there are really 2 key points to be made. As Holger already mentioned, the net financing receivables have grown 2% from CHF 6.584 billion to CHF 6.690 billion. And secondly, with the 2% growth in P loans, we have managed to outgrow the market in the first half of '26.

With regard to the liability side on the next page, there are really 4 key messages to be covered: funding profile, cost of funds, the funding mix and then, of course, liquidity and funding ratios.

Our funding profile remained well diversified in the first half of '26 with deposits representing 57% of total funding and non-deposit funding 43%. Total funding was broadly stable at CHF 6.3 billion. Now importantly, our end-of-period funding cost declined further to a level of 1.17%, while the remaining term increased slightly to 2.3 years.

On the wholesale side, we continue to strengthen the covered bond pillar now with 3 outstanding issuances, while the ABS matured in May '26. Our liquidity and stable funding ratios remained very strong with an LCR of 446% and an NSFR of 112%.

With that, let's stay on the right side of the balance sheet and talk about capital. With a Tier 1 capital ratio of 17.7% and a CET1 ratio of 15.3% as of June '26, our position remains strong.

RWAs logically increased in line with our net financing receivables growth. And our dividend policy, and that's important, remains unchanged. The company intends to pay a dividend of at least CHF 4.60 for 2026 and growing thereafter.

Now with that, I'd like to hand over back to Holger, who will provide more detail regarding the acquisition of the majority of Santander's Swiss auto business.

Great. Thanks, Christoph. So look, as mentioned, we're very excited about the acquisition of Santander's Swiss auto financing business in Switzerland. Really, we look at this as a strike zone opportunity for us, right? You know our clear approach to M&A, and this deal is very compelling strategically and with attractive financial returns.

A couple of points I'd mention here. First, it really strengthens our position in one of our core pillars, right? We like the auto business. It is in our DNA. It is a secured business. We have great market coverage, and this is a strong addition.

Second, we have communicated at the beginning of the cycle that we want to invest and drive scale in auto, and we're doing just that. This opportunity adds significant scale to our new platform, providing meaningful leverage.

Third, it expands our partnership network. We're adding existing partnerships with importers and dealers across the country.

Fourth, and this is important. We're entering an exclusive commercial corporation agreement with Santander that allows us to participate in pan-European partnerships going forward as it essentially makes us their Swiss partner for such opportunities. So really a strong pillar for our auto business and for future growth.

Christoph will talk later about the financing. We have a well-balanced and diversified solution here and expect closing of the transaction in November this year. EPS will be accretive from next year on with ROE increases of around 25 bps from 2028. Capital target and dividend policy remain unchanged.

Just a few points on this next slide on the strategic rationale, a few illustrations to add some color to this, right? So we're strengthening our auto business to both scale and diversification. We're adding roughly 25% of receivables, which gives us a 4-point lift in market share and delivers diversification, both in terms of new car mix as well as distribution relationships.

So overall, great opportunity, straightforward asset deal where benefits come from the book acquisition as well as relationships with one of Europe's leading auto financing players, number of importers as well as dealers across the country.

So back over to Christoph for a bit more detail on this transaction.

No. Thanks, Holger, for laying out the strategic rationale. In terms of financial implications, there are really 3 topics to be covered.

Firstly, as to the P&L impact, the acquisition is going to be EPS dilutive in 2026. That's driven by day 1 expected credit loss recordings and some integration costs. Now starting 2027, the acquisition is going to be EPS accretive, adding 25 basis points of ROE by 2028 and then going forward.

Secondly, the purchase price of CHF 820 million covers CHF 755 million of net financing receivables, CHF 46 million of PP&E, which is linked to operating lease positions and CHF 19 million of intangibles. No goodwill will be recorded.

The financing will be comprised of CHF 120 million of equity and CHF 680 million of debt. As to the capital management, we will use deployable excess capital and our Tier 1 capital ratio will be impacted by 70 to 80 basis points, and it is expected to be around 17% at year-end '26.

In addition to that, it's important to note that the credit risk profile of the bank will improve with secured assets increasing to north of 50% and incremental capacity to issue covered bonds and to take in more retail deposits. All of that explains the 3 topics that are important to note with regard to financial implications.

And with that, back to Holger to wrap it up with a few outlook-related comments.

Very good. Thank you, Christoph. So a couple of words on outlook, what to expect for this year. So we'll continue our prudent focus on profitable growth, balancing risk, volume, price, as you know from us.

In operational excellence, we're progressing with automation and personal loans as well. We want to continue, as we have simplifying our application landscape and decommissioning. Leverage the momentum we have in personal loans and clearly continue to scale the auto platform. As we said, we look to close this transaction in November for a focused integration going forward.

We also want to embed our simplified leaner organization across the business for continued simplification of the company. And on the outlook, and this is now adjusted for the transaction. We do continue to expect organic net revenues to grow in line with GDP. Loss performance, as Volker already said, slightly above midterm guidance, given the accounting impact.

Cost/income ratio at 43%. Importantly, H2, excluding transaction, below 40%, the ROE around 14%, strong capital, unchanged dividend policy. And then we look forward to giving you an update on our next strategic cycle in December this year.

Now before we wrap, I want to take this opportunity to thank Volker for his leadership and partnership over the many years in this company. We are, of course, here in a good position given the joint transition work between Volker and Christoph. We talk about risk management as part of our DNA, and Volker has really played a key role in embedding these capabilities in our organization.

So Volker, a big thank you again. And with that, let's turn over to questions.

[Operator Instructions] Our first question comes from Nemes Mate, UBS.

I have 3 questions, please. The first one would be on H1 financials and the delta from here. I'm specifically interested in the moving parts to net interest margin. You were at 5.4% in H1. You are expecting 5.4% stable for the rest of the year.

Could you comment on what do you expect in terms of asset yields, I suspect primarily on personal loans? And where do you see financing costs move from the end of period at 1.17% here? Any color on that would be appreciated.

And the other two questions are on the acquisition. Firstly, Holger, you mentioned that part of the deal is an exclusive partnership on a pan-European level with Santander. Can you help me understand what does this mean in practice?

And the other question is on the financials of the acquisition. It's clear that transaction helps you gain scale, helps you deploy your excess capital into productive use. But I was just wondering, would you be able to comment on the ROI, the return on investment on the acquisition? That would be very helpful.

Yes. Thank you, Mate. Let me start with a bit of context on the acquisition and then hand over to Christoph for the financials and also the NIM question in general.

So Mate, again, as we said, right, strikes an opportunity for us. It's also a straightforward transaction as an asset deal during the discussion with Santander, at some point, we had contemplated other constellation, which might have led us into a holding structure as a favorable advantageous structure. But of course, this is a straightforward simple outcome to execute.

And as we said, it helps the scale, leverage our platform, expands our partnership universe. Now specifically to your question, Mate, many importers when they go through deciding who to partner with on financing in a region, in Europe, in this case, right? I mean, you have 2 options. You either go country-by-country that makes it complicated, right, because you have many, many partners to deal with or you choose one partner that can cover the entire continent in this case.

And that is the typical approach that importers would take. And so that gives us an opportunity now to be Santander's essentially partner in Switzerland for such pan-European opportunities for these importers. Hopefully, that clarifies it. Otherwise, let me know and we can dive a bit deeper.

It does.

Excellent. So that's really something we're excited about and a real addition in terms of the tools that we have at our disposal for growth.

So Christoph, let me hand over to you for the financial and the acquisition and the NIM.

The NIM question, alright. Look, first of all, I like the transaction for the reasons you've mentioned. And on top of that also for the fact that we are enhancing distribution capabilities, get an operating lease capability with it and most importantly, a secured book expansion, which then has positive impacts on covered bond capacity and retail deposit capacity.

Now that said, the transaction is going to be already accretive given the fact that it is a secured book with relatively lower price or return profile. It will be accretive, but to probably a slightly lesser degree than you would expect from a P loan book, for instance.

Now because we do have a day 1 upfront, loan loss provisions to be booked and because we have some integration costs upfront, 2/3 of which sit in '26 and 1/3 in '27, the deal will be initially dilutive, but then, as we mentioned before, at 25 basis points of ROE, which is quite nice to see.

Back to your investment -- sorry, interest margin-related question. Look, as you could see from the page presented earlier, generally speaking, we are managing yields at a quite a stable level. There is, of course, linked to the KKG, maximum interest decrease, an impact on the P loan book. Now -- and as higher-priced vintages mature, portfolio yields are gradually normalizing by lower funding costs partly offset yield pressure, and I've talked about that earlier today.

So now we are in the business of actively managing that interest income through the cycle. And we do expect the yields compression to moderate with yields progressively stabilizing over time. That's pretty much it.

Our next question comes from Venditti Andreas, Vontobel.

Yes. Maybe on the guidance you provided in terms of the impact of this year, it would be helpful to get a split of the CHF 11 million that you guided. How much is that from integration costs? And how much is this potentially from loss provisions? And would it be fair to assume that going forward, after this onetime effect, actually, the acquisition should have a positive impact very slightly, of course, on the loss rate due to the secured business, of course. But also on the yield in the auto business, if my assumption correct that this is primarily a new car business, and therefore, the yield should actually be lower compared to your current book, which is more used car.

And maybe you could comment a bit on the commission income side. For instance, on the credit card, how you see that? I mean, you mentioned the impact from the FX side, but maybe you could comment a bit further on what you see there and also on the NPL in terms of the pruning of the book, where you stand and what to expect going forward?

Yes. Great, Andreas. And Christoph, why don't you take the question on guidance, also in terms of the split of the CHF 11 million, the commission question, I'll take buy now pay later.

Look, as I mentioned just before, the impact of the transaction in year 1 and year 2 is there and the CHF 11 million of net impact in '26 represent roughly CHF 14 million pretax. Of that CHF 14 million pretax, roughly CHF 8.4 million are linked to day 1 expected credit loss recordings and CHF 5.6 million are related to day 1 or 2026 OpEx.

Now in '27, again, the level of that impact is going to be not more than half of what it was in '26, and the operational reason for that is that we are going to migrate the portfolio. We're going to shift originations and so on, and some of that is still fragging out into '27. So that's the answer to your first question.

Now the second question was whether there would be an impact on the loss rate going forward. Now broadly speaking, we're buying a low-risk secured book here, very similar to the new car business we're doing in Cembra already, although that is clearly volume-wise inferior to the used car business we're doing. But we know what we're doing here. And we do expect, generally speaking, a moderate impact and an impact that should directionally be moderately positive, yes. it's not going to shake the overall equation significantly. That's maybe the short message.

Now with regard to yields in the order book, again, we do have used car portfolios in our book, which is yielding directionally below the level of the used car book. Now, we're going to add more of that. So logically, the average yield should moderately decline. That's a logical expectation. But again, let's not forget about the added benefit of risk profile calibration and funding capacity increase, which is strategically quite valuable in addition to just the yield question.

With regard to your last question on commission income related to credit cards and in particular, FX-related impacts. Look, what's really good on the credit card side, from my point of view is that the customer base is growing. Our book is growing, our net financing receivables are growing, and then that's quite a sticky trend. So we're enjoying a good and growing interest income, and we do have a slight challenge on the fee line right now, but it is temporary in nature, and it is simply just linked to the fact that in the first half of '27 compared to the first half of '26, there's quite a differential in terms of the strength of the Swiss franc.

And that means technically simply that certain transaction volume balances that are being translated into Swiss franc are translated to a lower Swiss franc level. We look at this trend as temporary in nature, nothing special and not, probably not to be seen again in the foreseeable future.

Great. Thanks, Christoph. The question on buy now pay later. Look, I think we've explained some of these dynamics in the past, right? We've essentially finalized the exit of some non-strategic partnerships here. We still see a little bit of impact there in terms of the associated volumes. But the flip side is, and we quite like this, right, the relationships we have with TWINT with some of the retailers that we onboarded recently are really developing well.

Compensating for this, you also see the increase in billing volumes. We slightly derisked the activity. So this is why the nominal amounts are a bit lower. But we're on a good track here in terms of, again, just as we do across the board focusing on profitable growth in this product line as well.

And then as we said, we're also continuing to work on cross-sell opportunities. And last not least, this being a significant element of our value proposition to partners across the board.

There is some background noise. If someone is not speaking, please go on mute, and thank you. Andreas, hopefully that answers the question.

[Operator Instructions] Our next question comes from Regli Daniel, ZKB.

I have two kind of follow-up questions to Andreas' questions on buy now pay later and credit cards, then I have a third question on cost of financing.

So first on credit cards. And here, obviously, commissions, as you have explained, have been a bit disappointing driven by this FX volumes effect. But can you give us a little bit of backbone confidence about the credit card business? So can you talk a bit about the number of cards, how is this growing? And what are your expectations in the mid- to longer term from this business in terms of revenues or business volume growth, if you want?

And then similarly on buy now pay later, you have, again, talked about kind of portfolio restructuring or can you give us a bit of a time line? Is this now done? And do we look into a clear future and what are your growth expectations from buy now pay later? Is this still kind of double-digit growth business? Or should we kind of get used to being, let's say, lower single-digit growth also for the foreseeable future?

And then lastly, on the cost of financing. And as we have heard, you had seen this pressure from the maximum rate caps, which were applied by 1st of January on lower levels. How do you see the kind of potential to reduce your cost of financing going forward, particularly given we have seen kind of a bit of a change in the outlook for interest rates going forward?

Yes, Daniel, thank you for the question. So let me take the first two and then Christoph, the cost of funds.

So look, we're quite pleased broadly speaking, and overall, right, with the progress on cards, right? Receivables are up. And so that speaks to the strength of the portfolio. Number of cards are up. Our co-brand programs are running well. Our own proposition is running well. And as you know, we continue to engage with potential partners in the market to expand what we have today and add to this beyond that.

So in general, I think strong portfolio, Daniel, we do expect, as everyone else, right, we're making trade-offs in terms of risk, price, volume, but we do expect, as we said, overall, right, the guidance revenues to grow in line with GDP and cards being an integral part of that guidance.

Buy now pay later, look, the restructuring itself is essentially done, Daniel. I think what you're seeing is, if you look year-over-year, you do have some residual pressure. But that's what I was trying to say, right, the underlying performance of the focus areas that we have, the new partnerships that we have onboarded, we see solid growth and continued growth, right? Whether that's to TWINT, where we have a strong relationship. We're building out the product suite, great platform, great reach and some of the other relationships that we have.

So we do expect growth to come back into this business going forward. Whether or not it's low or mid or upper single digits. I think this also depends a little bit on how e-commerce is developing, how that penetration increase, et cetera. But certainly, I do see this business going back into growth.

And let me hand over to Christoph for the cost of fund question.

Thank you, Holger. Look, we're currently experiencing cost of funds at a level of 1.17%. I've already alluded to that. As we go through the year and reach the end of this year, we're probably going to be at a level of slightly higher than that, but not materially. And that's driven by two things. There's a couple of older vintages, which were priced extremely favorably maturing.

And secondly, as we execute the Santander-related transaction in the fourth quarter, we will raise some debt at current cost levels. So the combination of the 2 will drive total COF level slightly up.

Now going forward, sort of medium-term related question on linked to interest rate development, assuming for a moment that rates may start to go up at some point in late '27 or '28. For us, that's kind of -- the way we look at that is that yields will then have a tendency to go up again, because maximum rates may shift and cost of funds may also slightly go up. So overall, the net interest margin will be a dynamic game to be played.

We do have -- we're going to have continued the ability to influence cost of funds in that scenario by optimizing mix and by obviously doing a good job taking them in, in terms of pricing. But as you know, we're focused on margin management and guiding that as opposed to yield as such or cost of funds as such.

Our next question comes from Anne-Chantal from Octavian.

I just have a question. There has been a lot of reorganization in terms of personnel, but also structure in Cembra announced in H1. And for instance, you have transited from 9 branch, making it 5 hubs. So if you could maybe tell us how this transition from branch to hub will improve the customer experience and also the service delivery and ultimately, also the efficiency in the organization.

Sure. Anne-Chantal, thanks for the question. Yes, indeed. So we've been quite deliberate on the structure. I mean, start by saying we are, by definition, an omni multichannel player, right? We service the market quite broadly, across our product categories, and we want to be where the customer can best access us. And that includes and continues to include very clear and deliberately physical distribution.

This centralization around hubs, see, one, we've put a lot of emphasis on where we locate these. You may have heard recently about the one we opened in Lausanne. And the other thing that this really gives us, Anne-Chantal, is a possibility to some larger centers to co-locate our expertise and customer-facing personnel across products at these hubs.

And so we'll be able to service customers more broadly across the needs that they have. And it also gives us scale in these hubs, which drives a bit the efficiency element that you talked about. That's really the notion behind it, right, multichannel player. We want to be and we will be where the customer is looking for us, whether it's in the digital or physical world. That's the main background.

Anything to add, Christoph?

Yes. Thanks, Holger. Looking back and looking at this topic from my experience as a sales leader in Central and Eastern Europe, one of the things I'm looking at right now is sales force effectiveness and the impact of such relocation moves on customer stickiness and propensity to still look for us and visit us. And I was very positively surprised that there was really no dent in that respect. So customer behavior was not impacted by this consolidation effort.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mr. Holger Laubenthal for any closing remarks.

Yes. Thank you, Yusof. Look, thanks, everyone, for dialing in this morning. I think we have some exciting news that we shared here with the acquisition. I think it really strengthens our position in the auto business, expands our footprint, expands access to more deals and growth going forward. We also reiterated the guidance that we have provided on the core performance, excluding this transaction. We're pleased to have returned to growth across business units, including personal loans.

And with that, also looking forward in terms of the guidance that we've given for the second half, including net revenue growth in line with GDP. And then we'll -- at the latest, we look forward to talking to you at the Investor Day at the beginning of December. Thank you very much, and have a great day.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Good morning, everyone. Great to be here for the presentation of our full year results for 2025. As usual, here with our CFO, Pascal Perritaz, our CRO, Volker Gloe, and look forward to walking you through the presentation. And then as always, we'll take your questions.

Let me start with the key messages we have for you this morning. First, with continued focus on delivering on our transformation and executing our strategic programs, we have yet again been able to increase net income to -- for the year to CHF 180 million. Second, our efficiency drive continues to deliver with CHF 19 million of cost savings. We're at the upper end of the guidance that we provided.

In a volatile global economy and interest rate climate and a somewhat less predictable macro environment, we have successfully defended our net interest margin and held the line on loss performance with well-calibrated volume, price risk management across our product lines. This active portfolio management has led to selective growth across our products. As you know, we're optimizing for profitability. The slowdown in personal loans has thus largely been offset through growth with a bias towards secured assets in less risky segments.

Given this overall strong performance and capitalization, we're pleased to announce a proposed dividend increase to -- of 8% to CHF 4.60 and extraordinary dividend of CHF 1. Finally, with revenue growth expected in line with GDP and further significant cost savings, we continue to pace towards our financial targets and expect a 2026 ROE of around 15%.

Let me give you the highlights of last year's performance. Net income up 5%, as explained, with net revenues and net financing receivables lower, reflecting focus on profitability, further significant improvements in cost/income ratio to 45.2% and 43% in the second half. Loss performance came in at 1.1%, in line with the guidance and ROE at 13.7%. This resulted in very strong Tier 1 capital ratio of 17.6%. And with that, the proposal of an ordinary dividend of CHF 4.60 and extraordinary dividend of CHF 1.

As we zoom in on the specific segments in the markets, as already mentioned, lending in 2025 reflected the continued shift into more secured business and payments, solid with growth in credit card assets. By product, this means in personal loans, we continued our approach with growth on better performing, more profitable segments and degrowth in less-performing segments. This approach is delivering as planned with very solid new vintage risk metrics and more on this later from Volker. We have also held our market share in a contracting market in the second half.

Auto continued to grow nicely. Our new leasing platform has further strengthened our proposition and net financing receivables were up 3%. Cards assets also up slightly, driven by our own proposition and co-brand partnerships and buy now pay later core activities were up. As you see in financing volumes, billing volumes down due to the portfolio consolidations we already explained and articulated. So overall, and in the mix across products with a bias towards secured assets, we continue to hold very solid positions in our markets.

A few items to highlight operationally aligned with our dual transformation objectives, as you know, both efficiency as well as generating increased customer value. On the business and operating model simplification, we've aligned our distribution network into regional centers, consolidating our presence and enabling full service capabilities in high-visibility locations across the country. We've also driven infrastructure consolidation forward meaningfully. This is an important element of our efficiency programs, retiring and decommissioning numerous major systems and apps and in-sourcing others to drive further simplification and business model resilience.

We discussed the auto platform in the summer. We're extremely pleased here, with significant tangible efficiency increases, higher automation as well as faster and simpler processing for our partners.

Our app with now over 600,000 enrollments evolves increasingly into a comprehensive integrated platform for our users. We now serve card, auto and loan customers through this app and continue to launch value-added services and products on a regular basis.

We're also excited about our new and enhanced loyalty proposition for the Certo! credit card family. This is a unique program in Switzerland with a comprehensive loyalty ecosystem that allows merchants to connect with targeted customer segments and offers enhanced and seamlessly accessible and visible benefits for our customers. We've already signed up over 30 retail partners and plan to add more as we go along.

So with that, let me hand over to Pascal to go through the financials in more detail.

Thank you, Holger, and good morning, everyone. I'm pleased to report a strong financial performance for the full year 2025. The net income increased by 5% to CHF 179.6 million demonstrates the resilience of our business model and the continued benefits of our transformation program.

With that, let me go through the P&L. The increase in net income was primarily driven by lower operating expense and continued solid risk performance. The net revenue decreased by 2% to CHF 542 million, reflecting the selective growth in receivables in lending and lower interest income in cards following the regulatory change in maximum interest rates. The net interest income decreased slightly by 2% with the impact of this lower pricing on assets as well as reduced interest income from cash and securities, partially offset by lower interest expense. We successfully defended our net interest margin at 5.5%.

Commission and fees income amounted to CHF 170 million and remained broadly stable across all revenue streams. The consolidations of the BNPL portfolio and the runoff of the Cumulus credit card migrations portfolio were both successfully completed in 2025. Provisions for losses remained stable at CHF 74 million, resulting in a loss ratio of 1.1%, and Volker will further comment soon.

Operating expense decreased by 7% to CHF 245 million, and this is mainly driven by the efficiency gains from our strategic transformations, including the completed infrastructure consolidations and continuous progress automation. As a result of this decrease in operating expense, the cost/income improved by 2.9 percentage points to 45.2% compared to 48.1% in 2024.

Let's now talk about the net financing receivables and the yield development. The net financing receivable declined slightly by 1%, precisely 0.6%, to CHF 6.6 billion, and this is reflecting our active portfolio management and the focus on our high-quality assets as part of our Cembra DNA. The auto lease and loans mainly secured business grew by 3%, supported by the increased used car penetrations and the successful rollout of our new leasing platform. The personal loans declined by 6% due to the selective underwriting and pricing to maintain risk-adjusted.

Credit cards grew by 1% with stable customer engagement and the continued rollout digital features like Scan2Pay, installment-to-pay or our newly launched loyalty program.

Risk-adjusted pricing across auto and personal loans contributed positively to yield stability through the year in lending. Card yield was impacted mainly by the change in maximum interest rates.

Let's now talk for provisions for losses, and I would like to hand over to Volker, our Chief Risk.

Yes. Thank you, Pascal. Loss provisions for '25 came in at CHF 73.6 million. The loss rate stayed stable at 1.1%, so very much comparable with the long-term trend, in line with our expectations and also the guidance that we provided for 2025 when we have been speaking about a loss rate of around 1%.

Numbers in '25 continue to be impacted by the past changes in accounting estimates. We've been explaining the need to synchronize collections and write-off procedures before and its purpose to allow for more collections activities to finalize before writing off an asset. As expected, the effect -- so the positive effect on losses has been more prominent in the first half of the year than the second half. It has also influenced the portfolio quality metrics throughout the year as shown in the numbers on the 30-plus delinquencies and NPL, a computation of how normalized numbers look, you can see on the upper right of this page.

While reported NPL numbers are going up, they are mainly driven by this aforementioned synchronization effect and its mechanics. When taking out this effect, numbers are about stable, though there are certainly some product-specific variations. As this synchronization effect now is tapering off, we expect going forward more stability in reported numbers and not only in the adjusted figures.

Generally, we stay very prudent in our risk taking in '25 and have been selective in what areas we wanted to grow and where we, in the current environment, rather stay cautious. And we continue to calibrate our strategies in this triangle of risk, price, volumes for hitting the right balance for optimizing profitability. This is then also reflected in our new business quality, where the portion of good quality CR1 and CR2 volumes, especially CR1, is increasing. Our deliberate focus on leasing volumes is impacting this development. While specifically on personal loans, we kept our cautious approach for ensuring an overall strong portfolio quality.

As we feel comfortable with the current risk/reward level, we started to adapt our policies to allow for more, though obviously still controlled growth going forward. We do that through data analytics, more granular segmentation, and it allows us to reenter segments that we deliberately excluded before. This seems justified when looking into the vintage write-off performance, where we see that the recent changes and prudent policies are paying off, as illustrated on the bottom left, where the latest vintage, the very short curve, is certainly among the best ones.

When it comes to outlook, I mean, the current environment might create some difficulties to come with exact predictions for the future. Nonetheless, currently, we would not see any reason why loss performance for '26 would materially deviate from '25. In other words, or simple words, our expectation is that losses for 2026 would again come in at an around 1% loss rate level.

And with that, I hand it then back to Pascal.

Thank you, Volker. Let's talk about operating expense. As mentioned before, the operating expense decreased by 7%, and this is reflecting our strong cost discipline and the benefits from the efficiency initiatives. 10% reductions in personnel costs, compensation and benefits. And this is supported by the continued FTE optimizations, mainly due to the automation initiatives and the optimization of our operating models, lower depreciation driven by completions of amortization of some intangible assets related to past acquisitions and over legacy assets.

And we have seen as well as some lower marketing and professional services expense due to the tight spending discipline. This effect resulted in a cost/income ratio, as mentioned before, 45.2%. I'm particularly pleased with the second half of the year, a cost/income ratio below 43% as of -- precisely as of 42.9%.

On the next page, the ongoing technology initiatives, including the infrastructure consolidations, automation, reduced amortization of further legacy assets and continued disciplined expense management will contribute to the 2026 OpEx reductions between CHF 15 million to CHF 20 million. With the expense trend and the actions triggered over the last 2 years, it puts us firmly on track to reduce our cost base by this amount, CHF 15 million to CHF 20 million in 2026, reaching 39% to 41% for the full year 2026, respectively, further improvement towards the 39% target cost/income ratio. Balance sheet.

Our balance sheet remains robust. Net financing receivables slightly lower at CHF 6.6 billion with the portfolio quality improving with the continued shift towards secured and higher quality assets, as mentioned earlier.

Funding increased modestly, driven by continued growth in retail deposits. The shareholder equity increased by 5%, reflecting the net income partially offset by the CHF 125 million dividend.

Funding. We further strengthened and diversified our funding base. The retail deposit continued to grow following the successful product redesign, savings product. In 2025, we successfully launched 2 auto covered bonds issuance of each CHF 150 million, and this is adding a low-cost and flexible funding tools to our funding mix. And the end of period, the funding cost improved to 1.33%, continuing the trend of lower funding expense supported by the easing of the interest rate environment. Liquidity metrics remained strong with LCR at 744% and NSFR at 116%.

Let's talk capital. Our capital positions remain strong with a Tier 1 capital ratio of 17.6%, above our midterm target of 17%. The risk-weighted assets increased by 3%. This is mainly due to the adoption of the FINMA Basel III final standards, reducing the Tier 1 by 0.6 percentage points as we communicated previously.

Reflecting both on one side on the strong financial performance and the confidence in our future earnings power, we will propose an increased ordinary dividend of 8% to CHF 4.60 per share and an extra dividend or special dividend of CHF 1 per share, leading to the 17.6% Tier 1 capital ratio mentioned before.

Our capital policy remains unchanged, balancing organic growth, disciplined acquisitions and M&A and the return of excess capital to shareholders. We expect the Tier 1 ratio -- Tier 1 capital ratio to be at around 17% by year-end 2026 and dividend growing at least in line with sustainable earnings growth. With a consistent strategy execution, disciplined risk management and strong operational delivery, we entered 2026 with solid momentum.

With that, I would like to hand over to you, Holger.

Great, Pascal. Thank you. So let me walk you through our strategy execution scorecard here on this next page. As you know, 4 strategic programs built on our DNA. Some of these I mentioned already, but prudent risk management continues to deliver, particularly against a less predictable macro environment. Our funding position is strong with an extended toolkit, as Pascal just explained.

We're pleased with our progress in operational excellence, leading to continued improvements in the cost/income ratio on the back of almost CHF 20 million cost reduction in 2025.

On the commercial side, we're accelerating product and service innovation. We're excited about the new loyalty proposition as explained. We've added new partners, and we see good growth in our partnership with TWINT.

Last but not least, we're proud of the work our teams do every day and the recognition such as being recognized by Great Place to Work as one of the best workplaces.

You can see the KPI we track on the right, both for 2025 and also for the strategic cycle to date as we're now in the final year, of course, of that cycle and really mostly on track across growth, capital, cost income losses and others and continued trend towards the target corridor such as an ROE.

So let me bring this together in our outlook for the last year of this cycle, again, along our defined programs. First, you can expect us to continue our careful calibration of risk, volume, price as it relates to originations mix between secured and unsecured business, balance sheet and non-balance sheet income as well as growth across our products. It's a proven concept for us.

Second, we will continue to drive automation and simplification across the company with a focus on personal loans and continued consistent decommissioning of legacy systems. We've mentioned the related cost reductions for the year.

Commercially, we're looking to leverage the cashgate expansion and product initiatives such as embedded finance and personal loans and continued benefits from our auto platform for profitable growth in the lending business and the range of new services launched, the new loyalty program and partnership penetration to drive growth in payments, mostly through commission and fees.

On the culture side, we're driving the organizational alignment with the new customer and growth division to embed customer centricity even deeper in our operating model to deliver against these initiatives mentioned.

Last, we're excited about defining the strategy and key programs for the coming strategic cycle as we take Cembra into its next chapter. And we're planning to have an update for you on this towards the end of the year in the fourth quarter.

What this implies for 2026? We expect continued resilient performance with net revenues growing in line with GDP, stable net interest margin, further significant improvement in the cost/income ratio, stable loss performance and strong capital, overall delivering an ROE of around 15%. This implies substantially all KPI we set out around 4 years ago to land at or within range of the objectives we communicated at the time, including cumulative EPS growth, before we head into the next strategic cycle, including further performance improvements going forward.

Now a few words about the change in our Management Board. And it is with sincere appreciation that we marked the conclusion of Pascal's tenure here at Cembra. Over the past 8 years, he's played a pivotal role in strengthening our financial position, reinforcing our capital discipline, supporting the consistent execution of our strategy.

On a personal note, I have greatly valued our partnership. and the trustful collaboration that we've built. Together with this outstanding team, we've achieved a great deal since we've worked together. Pascal leaves Cembra in a strong position and his contribution will have a lasting impact. I'd like to thank him sincerely for his commitment and leadership and wish him, of course, all the best for the future.

At the same time, I'm very pleased to welcome Christoph Glaser as our new CFO effective March 1. Christoph brings more than 2 decades of experience in finance, risk and operations across international and listed organizations with deep expertise in consumer finance and lending. So he combines strong and broad technical competence with leadership experience and strategic perspective. Given this, he is a strong addition to our leadership team as we continue to execute our strategy and drive the next phase of Cembra's development.

With that, thank you for listening to the presentation, and we look forward to your questions now.

Our first question comes from Máté Nemes from UBS.

I have three questions, please. The first one is on risk. We are seeing a quite clear and material intra-year swing in the loss rate, first half around 0.9%; second half, about 1.25%. Could you elaborate what drove this or confirm that my understanding is correct? Is this mainly related to the synchronization of collection and write-off procedures? And if so, is the second half loss rate indicative of what we can expect on a run rate basis without any further management, i.e., how do we get back to the 1% -- roughly 1% level from here onwards? That's the first question.

The second question is costs. Clearly, another round of ambitious cost savings planned for 2026, CHF 15 million to CHF 20 million. And it seems like the bulk of that is coming from strategic initiatives benefits. If you could elaborate on what exactly is included here, that would be helpful.

And the last question is on NII and more specifically the margin. I think you're expecting a stable margin. We can clearly see declining funding costs. But at the same time, on the asset side, the now lower interest rate cap clearly means you have to reprice some of your personal loans. Could you give us an approximate bridge in 2026 as to the margin? And if you could also highlight how much of your personal loan portfolio is currently at rates above the regulatory limit?

Thanks, Máté. And let me hand over to Volker for the first question, and Pascal will take the next two.

Yes, Máté, you're absolutely right in your observation. So first half loss rate was at 0.9% and second half at 1.2%. And this difference between first half and second half is driven by the synchronization effect. That's an activity that we started to execute in Q4 '24 already, and that has been benefiting the first half more than the second half because we have now reached a kind of new equilibrium basically.

What I want to add to that is that we also in the past have been seeing always -- it kind of sends a bit of seasonality between the first half and the second half. So typically, the second half is slightly worse than the first half, which probably comes a bit on top.

I think generally, obviously, when it comes now to looking ahead, we do not manage the loss rate in isolation. We manage in this triangle for profitability. I mean we are now guiding for a loss rate in '26 of around 1% level. And I think we can get there. We will get there by actually managing this triangle.

Pascal?

Thank you, Máté. Second question is related to cost and ultimately the continued expected reductions of operating expense from CHF 15 million to CHF 20 million in 2026. And this is basically as the result of 4 specific activities, I would say 3 of them are highly strategic. The first one is obviously lower personnel costs expected resulting from the work we have done now over the last 1 to 2 years, meaning particularly the automation we have achieved in some of our processes and continuous optimizations of our operating models and service deliveries.

The second one is we clearly expect in 2026 further efficiency gains in IT. So we have done a lot of work related to IT consolidations, decommissioning of infrastructure, which we also still continue to do in 2026. And we'll have a bit of less funding costs related to strategic initiatives. Obviously, we'll start in 2027 as this new strategic program for 2026, it's more the end of the strategy cycle.

The third one is we will start to see a bit certainly less than what we have seen at this year, but continued reductions in depreciation and amortization expense from some software and intangible assets reaching the end of life in 2026.

And the last one is, I think what we have demonstrated now for almost decades, this very disciplined approach on expense management, depending on how revenue was developed, we clearly proactively manage any discretionary costs. So with that and particularly the initiatives which are being implemented, what we have achieved in 2025, we are -- we firmly believe that the CHF 15 million to CHF 20 million is achievable.

The last question is around the NIM. So we expect for 2026 a stable NIM, around the level that we have been in 2025. And given the strategy we have implemented over the last 1 to 2 years in the personal loans, we have more focus on high-quality assets by default, as we have a limited exposure now to contracts which are today priced at the max level.

That is very helpful. And Pascal, just wanted to thank you for the years of constructive collaboration and discussions we had on our earnings calls and other venues. I wish you the best in the next stage of your career. We'll clearly miss you dearly.

Thank you.

The next question comes from Daniel Regli from ZKB.

And obviously, I first would like to follow Máté. Also from my side, thanks a lot, Pascal, for the years of collaboration, and working together was always a pleasure.

To my questions. First, quickly on the personal loans book. And obviously, we have seen another decline in H2, which was not that unexpected due to more restrictive lending. Can you maybe talk a little bit about how you have kind of released your lending policy again early this year and whether there was some kind of connection to the U.S. tariffs and expected short-time work in certain segments of Switzerland.

And then secondly, a follow-up on the net interest margin. Can you maybe give us a little bit of guidance on the cost of financing side and how far you expect the cost of financing to go down this year?

Thanks, Daniel. Let me just start on the P loan side and then Volker over to you and Pascal on the NIM question. So the second half, there's a couple of dynamics here, right, Daniel. So firstly, as I mentioned, we held the share in the second half, which implies that the market sort of moved in a similar direction, right? I think this is something that you've seen from us frequently as a leader in the market. We typically set the tone in pricing. We set the tone in risk management and others and the market ends up following in a way. That's just to give you some context.

Let me hand over to Volker, indeed, for the questions on the policy and the impact of what we see in the market.

Yes, Daniel, the -- I mean it's part actually of regular risk management to optimize underwriting procedures and adjust it to the macro environment that we are currently seeing. With that said, I mean, macro in Switzerland is obviously very resilient. So even if there would be swings, we wouldn't be hit by that immediately that would take some time to kind of eat into the portfolios.

I mean when it comes to the releasing lending policies, the kind of adjustments that we have been doing, it's actually also part of regular risk management. We have been identifying segments that we have been exiting before because we wanted to be cautious. And now currently also with more granular segmentation, we feel comfortable that we can reenter these segments and by that support the growth, given that this is profitable growth. And that's kind of, again, back to this triangle where we try to find the right balance between risk, between the pricing and also the volumes to support growth in the business.

On NIM and particularly on the cost of funding or interest expense, first, I would like to reiterate the approach we have around first managing the net interest margin. So we have seen certainly some volatility in swaps rates. We have implemented as very clear the dynamic pricing. And depending on how these interest rates develop, we can -- we go up or down with the pricing with the target to calibrate the net interest margin around stable. If I look at now the interest expense, how they developed '24 to '25, 1.53% in '24, now 1.33%, we would expect a slightly reduction in 2026 as well.

[Operator Instructions] Gentlemen, there are no further questions. Mr. Laubenthal, back over to you for any closing remarks.

Excellent. Thank you. Well, look, thanks for dialing in, everyone, this morning and listening to our webcast here in terms of the earnings. I think good results, income at CHF 180 million. I think we're delivering on the key controllables in terms of cost loss. I think a good outlook for the remainder of the year, and we look forward to continuing the discussions with you. Thank you very much for listening in this morning.

Ladies and gentlemen, welcome to the Cembra Full Year 2025 Results Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Mr. Holger Laubenthal, CEO. Please go ahead, sir.

Thank you, Sandra, and good morning, everyone. Great to be here for the presentation of our full year results for 2025.

As usual, here with our CFO, Pascal Perritaz, our CRO, Volker Gloe and look forward to walking you through the presentation, and then as always, we'll take your questions.

We start with the key messages we have for you this morning. First, with continued focus on delivering on our transformation and executing our strategic programs, we have yet again been able to increase an income to -- for the year to CHF 180 million. Second, our efficiency drive continues to deliver with CHF 19 million of cost savings. We're at the upper end of the guidance that we provided. In a volatile global economy and interest rate climate and a somewhat less predictable macro environment, we have successfully defended our net interest margin, [Technical Difficulty] and loss performance with well-calibrated volume price risk management across our product lines.

This active portfolio management has led to selective growth across our products, as you know, we're optimizing for profitability. The slowdown in personal loans has largely been offset through growth with a bias towards secured assets in less risky segments. Given this overall strong performance in capitalization, we're pleased to announce the proposed dividend increase of 8% to CHF 4.60, and extraordinary dividend of CHF 1. Finally, with revenue growth expected in line with GDP and further significant cost savings, we continue to pace towards our financial targets and expect a 2026 ROE of around 15%.

Let me give you the highlights of last year's performance. Net income, up 5%, as explained with net revenues and net financing receivables lower, reflecting focus on profitability. Further significant improvements in cost income ratio to 45.2% and 43% in the second half. Loss performance came in at 1.1%, in line with the guidance and ROE at 13.7%. This resulted in very strong Tier 1 capital ratio of 17.6%. And with that, the proposal of an ordinary dividend of CHF 4.60 and extraordinary dividend of CHF 1.

If we zoom in and the specific segments in the market, as already mentioned, lending in 2025 reflected the continued shift into more secured business and payments, followed with growth in credit card assets. By product, this means in personal loans, we continued our approach with growth on better performing, more profitable segments and degrowth in less performing segments. This approach is delivering as planned with very solid [indiscernible] risk metrics and more on this later from Volker. We have also held our market share in a contracting market in the second half. Auto continued to grow nicely.

Our new leasing platform has further strengthened our proposition and net financing receivables were up 3%. Cards assets also up slightly driven by our own proposition and co-brand partnerships and buy now pay later core activities were up, as you see in financing volumes, billing volumes down to -- due to the portfolio consolidations we already explained and articulated.

So overall, and in the mix across products with a bias towards secured assets, we continue to hold very solid positions in our markets.

A few items to highlight operationally aligned with our dual transformation objectives. As you know, both efficiency as well as generating increased customer value. On the business and operating model simplification, we've aligned our distribution network into regional centers, consolidating our presence and enabling full-service capabilities in high-visibility locations across the country. We've also driven infrastructure consolidation forward meaningfully. It is an important element of our efficiency programs, retiring and decommissioning numerous major systems and apps and in-sourcing others to drive further simplification and business model resilience.

We discussed the auto platform in the summer. We're extremely pleased here with significant tangible efficiency increases, higher automation as well as faster and simpler processing for our partners. Our app with now over 600,000 enrollments evolves increasingly into a comprehensive integrated platform for our users. We now serve card, auto and loan customers through this app and continue to launch value-added services and products on a regular basis.

We're also excited about our new and enhanced loyalty proposition for the Certo! credit card family. This is a unique program in Switzerland with a comprehensive loyalty ecosystem that allows merchants to connect with targeted customer segments and offers enhanced and seamlessly accessible and visible benefits for our customers. We've already signed up over 30 retail partners and plan to add more as we go along.

So with that, let me hand over to Pascal to go through the financials in more detail.

Thank you, Holger, and good morning, everyone.

I'm pleased to report a strong financial performance for the full year 2025. The net income increased by 5% to CHF 179.6 million, demonstrates the resilience of our business model and the continued benefits of our transformation program. With that, let me go through the P&L.

The increase in net income was primarily driven by lower operating expense and continued solid risk performance. The net revenue decreased by 2% to CHF 542 million, reflecting the selective growth in receivables in lending and lower interest income in cards following the regulatory change in maximum interest rates. The net interest income decreased slightly by 2% with the impact of this lower pricing and assets as well as reduced interest income from cash and securities, partially offset by lower interest expense. We successfully defended our net interest margin at 5.5%.

Commission and fees income amounted to CHF 170 million and remained broadly stable across all revenue streams. The consolidations of the BNPL portfolio and the runoff of the Cumulus credit card migrations portfolio were both successfully completed in 2025. Provisions for losses remained stable at CHF 74 million, resulting in a loss ratio of 1.1%, and Volker will further comment soon.

Operating expense decreased by 7% to CHF 245 million, and this is mainly driven by the efficiency gains from our strategic transformation, including the completed infrastructure consolidations and continued progress automation. As a result of this decrease in operating expense, the cost income improved by 2.9 percentage points to 45.2%, compared to 48.1% in 2024.

Let's now talk about the net financing receivables and the yield development. The net financing receivable declined slightly by 1%, precisely 0.6% to CHF 6.6 billion, and this is reflecting our active portfolio management and the focus on our high-quality assets as part of our Cembra DNA. The auto lease and loans mainly secured business grew by 3%, supported by the increased used car penetration and the successful rollout of our new leasing platform.

The personal loans declined by 6% due to the selective underwriting and pricing to maintain risk-adjusted returns. Credit cards grew by 1% with stable customer engagement and a continued rollout digital features like Scan2Pay, InstallmentPay or newly launched loyalty program. Risk-adjusted pricing across auto and personal loans contributed positively to yield stability through the year in lending. Cards yield was impacted mainly by the change in maximum interest rates.

Let's now talk provisions for losses, and I would like to hand over to Volker, our Chief Risk Officer.

Yes. Thank you, Pascal. Loss provisions for '25 came in at CHF 73.6 million. The loss rate stayed stable at 1.1%. So very much comparable with a long-term trend in line with our expectations and also the guidance that we provided for 2025, when we have been speaking about a loss rate of around 1%. Numbers in '25 continued to be impacted by the past changes in accounting estimates. We've been explaining the need to synchronize collections and write-off procedures before and its purpose to allow for more collections activities to finalize before writing off an asset.

As expected, the effect -- so the positive effect on losses have been more prominent in the first half of the year than the second half. It has also influenced the portfolio quality metrics throughout the year, as shown in the numbers on the 30+ delinquencies and NPL. A computation of how normalized numbers look, you can see on the upper right of this page. While reported NPL numbers are going up, they are mainly driven by this aforementioned synchronization effect and its mechanics. When taking out these effects, numbers are about stable, though, there are certainly some product-specific variations.

As this synchronization effect now is tapering off, we expect going forward, more stability in reported numbers and not only in the adjusted figures. Generally, we stayed very prudent in our risk taking in '25 and have been selective in what areas we wanted to grow and where we, in the current environment rather stay cautious. And we continue to calibrate our strategies in this triangle of risk price volumes for hitting the right balance for optimizing profitability. This is then also reflected in our new business quality where the portion of good quality CR1 and CR2 volumes, especially CR1, is increasing.

Our deliberate focus on leasing volumes is impacting this development was specifically on personal loans, we kept our cautious approach for ensuring an overall strong portfolio quality. As we feel comfortable with the current risk reward level, we started to adapt our policies to allow for more, though, obviously, still controls growth going forward. We do that through data analytics, more granular segmentation and it allows us to reenter segments that we deliberately excluded before. This seems justified when looking into the vintage write off performance where we see that the recent changes and prudent policies are paying off as illustrated on the bottom left where the latest vintage, the very short curve, is certainly among the best ones.

When it comes to outlook, I mean, the current environment might create some difficulties to come with the exact predictions for the future. Nonetheless, currently, we would not see any reason why loss performance for '26 would materially deviate from '25. In other words, so simpler words, our expectation is that losses for 2026 would again come in at around 1% loss rate level.

And with that, I hand it then back to Pascal.

Thank you, Volker. Let's talk about operating expense. As mentioned before, the operating expense decreased by 7%, and this is reflecting our strong cost discipline and the benefits from the efficiency initiatives. 10% reductions in personnel costs, compensations and benefits and this is supported by the continued FTE optimizations, mainly due to the automation initiatives and the optimization of our operating models. Lower depreciation driven by completions of amortization of some intangible assets related to past acquisitions and other legacy assets.

And we have seen as well as some lower marketing and professional services expense due to the tighter spending discipline. This effect resulted in a cost income ratio, as mentioned before, 45.2%, and particularly pleased with the second half of the year, a cost/income ratio below 43% precisely 42.9%

On the next page, the ongoing technology initiatives including the infrastructure consolidation, automation, reduced amortization of further legacy assets and continued discipline expense management will contribute to the 2026 OpEx reductions between CHF 15 million to CHF 20 million. With the expense trend and the actions triggered over the last 2 years, it puts us firmly on track to reduce our cost base by this amount, CHF 15 million to CHF 20 million in 2026 reaching 39% to 41% for the full year 2026, respectively, further improvements towards the 39% target cost-income ratio.

Balance sheet. Our balance sheet remains robust. Net financing receivables slightly lower at 6.6% with the portfolio quality improving with the continued shift towards secured and higher quality assets, as mentioned earlier. Funding increased modestly, driven by continued growth in retail deposits. The shareholder equity increased by 5%, reflecting the net income, partially offset by CHF 125 million dividend.

Funding. We further strengthened and diversified our funding base. The retail deposit continued to grow following the successful product redesign, savings product. In 2025, we successfully launched two auto cover bonds issuance of each CHF 150 million, and this is adding a low-cost and flexible funding tools to our funding mix and the end of period, the funding cost improved to 1.33%, continuing the trend of lower funding expense supported by the easing of the interest rates and environment. Liquidity metrics remained strong with LCR at 744% and NSFR at 116%.

Let's talk capital. Our capital position remained strong with a Tier 1 capital ratio of 17.6%, above our midterm target of 17%. The risk-weighted assets increased by 3%. This is mainly due to the adoption of the FINMA Basel III final standards, reducing the Tier 1 by 0.6 percentage points as we communicated as of previously. Reflecting both on one side on the strong financial performance and the confidence in our future earnings power, we will propose an increased ordinary dividend of 8% to CHF 4.60 per share and an extra dividend or a special dividend of 1% (sic) [ CHF 1 ] per share, leading to the 17.61% capital ratio mentioned before.

Our capital policy remains unchanged. Balancing organic growth, disciplined accretion on M&A and the return of excess capital to shareholders. We expect the Tier 1 ratio -- Tier 1 capital ratio to be at around 17% by year-end 2026 and dividend growing at least in line with sustainable earnings growth. With a consistent strategy execution, disciplined risk management and strong operational delivery, we entered 2026 with solid momentum.

With that, I would like to hand over to you, Holger.

Great, Pascal. Thank you. So let me walk you through our strategy execution scorecard here on this next page. As you know, four strategic programs built on our DNA. Some of these I had mentioned already, but prudent risk management continues to deliver, particularly against a less predictable market environment. Our funding position is strong with an extended toolkit, as Pascal just explained.

We're pleased with our progress and operational excellence, leading to continued improvement in the cost-to-income ratio on the back of almost CHF 20 million cost reduction in 2025. On the commercial side, we're accelerating product and service innovation. We're excited about the new loyalty proposition as explained. We've added new partners, and we see good growth in our partnership with TWINT.

Last, not least, we're proud of the work our teams do every day and the recognition such as being recognized by Great Place to Work as one of the best workplaces. You can see the KPI we track on the right, both for 2025 and also for the strategic cycle to date, as we're now in the final year, of course, of that cycle and really mostly on track across growth, capital, cost income loss and others and continued trend towards the target corridor such as an ROE.

So let me bring this together in our outlook for the last year of this cycle, again, along our defined programs. First, you can expect us to continue our careful calibration of risk, volume, price as it relates to originations mix between secured and unsecured business, balance sheet, nonbalance sheet income as well as growth across our products. It's a proven concept for us. Second, we will continue to drive automation simplification across the company, with a focus on personal loans and continued consistent decommissioning of legacy systems, we've mentioned the related cost reductions for the year.

Commercially, we're looking to leverage the cashgate expansion and product initiatives such as embedded finance and personal loans and continued benefits from our auto platform for profitable growth in the lending business and the range of new services launched the new loyalty program and partnership penetration to drive growth in payments, mostly through commission and fees.

On our culture side, we're driving the organization alignment with the new customer and growth division to embed customer centricity, even deeper in our operating model to deliver against these initiatives mentioned.

Last, we're excited about defining the strategy and key programs for the coming strategic cycle as we take Cembra into its next chapter. And we're planning to have an update for you on this towards the end of the year in the fourth quarter. What this implies for 2026, we expect continued resilient performance with net revenues growing in line with GDP, stable net interest margin for the significant improvement in the cost income ratio, stable loss performance and strong capital overall delivering an ROE of around 15%. This implies substantially all KPIs we set out around 4 years ago to land at or within range of the objectives we communicated at the time, including cumulative EPS growth before we head into the next strategic cycle, including further performance improvements going forward.

Now a few words about the change in our management board. And it is with sincere appreciation that we mark the conclusion of Pascal's tenure here at Cembra. Over the past 8 years, he's played a pivotal role and strengthened our financial position, reinforcing our capital discipline, supporting the consistent execution of our strategy.

On a personal note, I have greatly valued our partnership and the trustful collaboration that we've built. Together with this outstanding team, we've achieved a great deal since we've worked together. Pascal leaves Cembra in a strong position and his contribution will have a lasting impact. I'd like to thank him sincerely for his commitment and leadership and wish him, of course, all the best for the future.

At the same time, I'm very pleased to welcome Christoph Glaser as our new CFO effective March 1. Christoph brings more than 2 decades of experience in finance, risk and operations across international and listed organizations with deep expertise in consumer finance and lending. He combines strong and broad technical competence with leadership experience and strategic perspective. Given this, he is a strong addition to our leadership team as we continue to execute our strategy and drive the next phase of Cembra's development.

With that, thank you for listening to the presentation, and we look forward to your questions now.

[Operator Instructions] Our first question comes from Máté Nemes from UBS.

I have three questions, please. The first one is on risk. We are seeing a quite clear material inferior swing in the loss rate first half around 0.9%, second half about 1.25%. Could you elaborate what drove this or confirm better, my understanding is correct? Is this mainly related to the synchronization of collection and write-off procedures? And if so, is the second half loss rate indicative of what we can expect on a run rate basis, without any further management i.e. how do we get back to the 1% -- roughly 1% level from here onwards? That's the first question.

The second question is costs. Clearly, another round of ambitious cost savings planned for 2026, CHF 15 million to CHF 20 million. And it seems like the bulk of that is coming from strategic initiatives benefits. If you could elaborate on what exactly is included here? That would be helpful. And the last question is on NII and more specifically, the margin. I think you're expecting a stable margin. We can clearly see a decline in funding costs, but at the same time, on the asset side, the now lower interest rate cap clearly means you have to reprice some of your personal loans.

Could you give us an approximate bridge in 2026 as to the margin and if you could also highlight how much of your personal loan portfolio is currently at rates above the regulatory limit?

Thanks, Máté, and good morning, and let me hand over to Volker for the first question, and Pascal will take the next two.

Yes, yes, Máté, you're absolutely right in your observation. So first half loss rate was at 0.9% and second half at 1.2%. And this difference between first half and second half is driven by the synchronization effect. That's an activity that we started to execute in Q4 '24 already, and that has been benefiting the first half more than the second half because we have now reached the kind of new equilibrium basically. What I want to add to that is that we also in the past have been seeing always it kind of [ tends ] a bit of seasonality between the first half and the second half.

So typically, the second half is slightly worse than the first half, which is -- probably comes a bit on top. And I think generally, obviously, when it comes now to looking ahead, we do not manage the loss rate in isolation. We manage in this triangle for profitability. I mean, we are now guiding for a loss rate in '26 of around 1% level. And I think we can get there. We will get there by actually managing this triangle.

Pascal?

Thank you, Máté. Second question is related to cost and ultimately, as the continued expected reductions of operating expense of CHF 15 million to CHF 20 million in 2026. And this is basically as a result of four specific activities, I would say, three of them are highly strategic. The first one is obviously lower personnel costs expecting -- resulting from the work we have done now over the last 1 to 2 years, meaning particularly as the automation. So we have achieved in some of our processes and continued optimization of our operating models and service deliveries.

The second one is we clearly expect in 2026 further efficiency gains in IT. So we have done a lot of work related to IT consolidation, decommissioning of infrastructure, which we also still continue to do in 2026. And we'll have a bit of less funding costs related to strategic initiatives. Obviously, we'll start in 2027, this new strategic program for 2026, it's more the end of the strategy cycle.

The third one is we will start to see a bit certainly less than what we have seen this year, but continued reductions in depreciation and amortization expense from some software and tangible assets reaching the end of life in 2026. And the last one is, I think what we have demonstrated is now for almost decades this very disciplined approach on expense management, depending on how revenue was developed, although we clearly have proactively managed any discretionary costs.

So with that, and particularly as the initiatives which are being implemented, what we have achieved in 2025, although we are -- we firmly believe that the CHF 15 million to CHF 20 million is achievable.

The last question around the NIM, so we expect for 2026, a stable NIM around the level that we have been as in 2025. And given as the strategy, as we have implemented the last 1 to 2 years in the personal loans, so we have more focus on high-quality assets by default, although we have limited exposure now to contracts, which are today priced at the max level.

That is very helpful. And Pascal, I just wanted to thank you for the years of constructive collaboration and discussions we had on earnings calls and other venues. I wish you the best in the next stage of your career. We'll clearly miss you dearly.

The next question comes from Daniel Regli from ZKB.

Yes. And obviously, I first would like to follow, Máté. Also from my side, thanks a lot, Pascal, for the years of collaboration and working together was always a pleasure.

To my questions. First, quickly on the personal loans book. And obviously, we have seen another decline in H2, which was not that unexpected due to more restrictive lending. Can you maybe talk a little bit about how you have kind of released your lending policy again early this year and whether there was some kind of connection to the U.S. tariffs and expected short time work in certain segments of Switzerland?

And then secondly, a follow-up on the net interest margin. Can you maybe give us a little bit of guidance on the cost of financing side and how far you expect the cost of financing to go down this year?

Thanks, Daniel, as well. Let me just start on the P loan side and then, Volker, over to you and Pascal on the NIM question. So the second half, there's a couple of dynamics here, right, Daniel. So firstly, as I mentioned, we held the share in the second half, which implies that the market sort of moved in a similar direction, right? I think this is something that you've seen from us frequently as a leader in the market. We typically set the tone in pricing. We set the tone in risk management and others in the market end up following in a way. That's just to give you some context. Let me hand over to Volker indeed for the questions on the policy and the impact of what we see in the market.

Yes, Daniel, the -- I mean, it's part actually of regular risk management to optimize underwriting procedures and adjust it to the macro environment that we are currently seeing. With that said, I mean, macro in Switzerland is obviously very resilient. So even if there would be swings, we wouldn't be hit by that immediately, that would take some time to kind of eat into the portfolios. I mean, when it comes to the releasing lending policies, the kind of adjustments that we have been doing, it's actually also part of regular risk management. We have been identifying segments that we have been exiting before because we wanted to be cautious.

And now currently, also with more granular segmentation, we feel comfortable that we can reenter these segments. And by that support the growth, given that this is profitable growth. And that's kind of -- again, back to this triangle, where we try to find the right balance between risk, between the pricing and also the volumes to support growth in the business.

On the NIM and particularly on the cost of funding or interest expense, first of all, I would like to reiterate the approach we have around first managing the net interest margin. So we have certainly some volatility in swap rates. We have implemented a very clear dynamic pricing and depending on how these interest rates develop, although we can -- we go up or down with the pricing, with the target to calibrate the net interest margin around stable. If I look at now the interest expense, how they developed '24 to '25, 153% in '24, now 133%, we would expect a slightly reduction in 2026 as well.

[Operator Instructions] Gentlemen, there are no further questions. Mr. Laubenthal, back over to you for any closing remarks.

Excellent. Thank you. Well, look, thanks for dialing in, everyone this morning and listening to our webcast here in terms of the earnings. I think good results. Income at CHF 180 million. I think we're delivering on the key controllables in terms of cost loss. I think a good outlook for the remainder of the year, and we look forward to continuing to discuss this with you. Thank you very much for listening in this morning.

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