Good morning all,

I had the radio on in the background just now whilst working, tuned into Vintage Radio, and on the 9am news broadcast, they were speaking about Cembra Bank for about a minute I think, referring to loans and/or credit cards but I really could not make out any details and my Swiss German is not fluent enough.

As a customer of Cembra, I would very much like to know what they were saying and what justified such a big piece in the news broadcast...

Can anyone please help to enlighten me? Would be much appreciated, thanks.

A minute is <<a big piece in the news broadcast>>?

Google is your friend ...... The Migros Cumulus credit-card will no longer be issued by Cembra (after doing so for 15 years) but by Migros Bank.

https://www.luzernerzeitung.ch/news-...rte-ld.2177191 ? [As Curley has just said]

Many thanks both :-)

Wow....Cembra share price currently down 26% as a result of this contract loss announcement.

Obviously, Cembra will suffer some revenue loss as a result but I wonder if this is an over-reaction or a buying opportunity now, hmmm...

Warrants a little further research I think...but I am seriously tempted to buy some shares right now.

I just found this on their investor relations website:

"Cembra plans to introduce an attractive successor product and sees alternative growth potential in the credit card business
Termination will have an impact on net profit from 2022; outlook for the current year and mid-term targets are confirmed, sustainable dividend policy is secured due to strong capital base"

https://www.cembra.ch/en/investor/news-media/

I'm sure it does but this time do it yourself, yeah?

Already have curley, and convinced myself that the market has over-reacted here :-)

Yeah, when Migros is involved, Switzerland trembles in it's foundation walls.

That‘s 850,000 credit card customers gone. You‘ll need an idea of how much turnover they are losing…

Maybe this is good news......for the people after a private or car loan. Cembra cannot afford to lose more business. Maybe they will be a bit more flexible in their acceptance criteria, or lower interest rate.

I leave a bookmark here, to check in the future which prediction will be fullfilled by reality

What puzzles me is why wasn't that done via Migros Bank from the start?

If they don't like alcohol, maybe they also had something against usury. Crazy people.

I also saw it on my watchlist change to green and found the same news. I don't even remember how it got on my watchlist, but I took a punt anyway at 67.4.

Not long ago, SYF was also terminated by Walmart in worse circumstances: https://www.ft.com/content/056cddac-...6-46fc3ad87c65

Let's see if a similar story plays out.

No technical capability. GE Money Bank as it was back then had the required know how. The new CEO decided that MB is now capable of bringing this in-house, when he found the time.

I don't know how many of the 850'000 Cumulus Cembra customers are going to end in the next 6 months, but one (me) had its card renewed just now in august, so I will be a customer for the next 3-4 years (I don't remember exactly).

Cembra was giving a decent dividend in the past years (the stocks, not the cumulus points from the card ). This dividend should not be very different this year, so it is a decent buy at current price.

Better to invest in companies that are able to reinvest at high rates of return. If this is not possible then management will have to return the cash to shareholders. This can be done in two ways: dividends and buybacks. Dividends are not the preferred means of returning cash to shareholders as they are taxed as income in CH. I prefer buybacks as it does not affect my income tax liability.

I just go slightly leveraged such that my interest is just below my dividend yield.

That’s another way to do it but I always try to be cognisant of the wisdom of Charlie and Warren.

Smart men go broke three ways - liquor, ladies and leverage. Charlie Munger

My partner Charlie says there is only three ways a smart person can go broke: liquor, ladies, and leverage. Now the truth is, the first two he just added because they started with ‘L’ – It’s leverage. Warren Buffett

I'm a few percent leveraged. I'm not going to have to sell unless the world ends!