Cembra Money Bank AG (CMBN) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the full year results 2019 conference call and live webcast. I am Sandra, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Robert Oudmayer, CEO. Please go ahead.

Thank you, Sandra, and good morning, everyone. I'm here with Pascal Perritaz, our CFO; and Volker Gloe, our Chief Risk Officer, to comment on the 2019 results. We have basically 3 sectors before we go to questions. First, I'll give you some highlights, then Pascal and Volker will run you in detail to the 2019 financial results, and I will come back for the strategy and outlook. If we go to Page 3 to the 2019 performance. I think we can say that we are pleased with the good performance in all business lines. The net income went up 3% to CHF 159.2 million, which represents an EPS of CHF 5.53. Total receivables up, as you can see, at 37%, with strong growth in auto and cards. The revenues up 9%, which is basically driven by cards fees, plus 9%, and the acquisition of cashgate, which also only gives you 4 months of revenue in 2019. Loss rates, stronger than in the past with 0.8%. Volker will comment later in the deck on the reasons for this. And a little bit higher cost-to-income ratio, mainly driven by the acquisition of cashgate. Pascal will comment later on the cost-to-income ratio. The ROE was at 15.7% with a solid Tier 1 capital ratio of 16.3%. And we proposed a CHF 3.75 dividend, stable despite the acquisition of cashgate, and in line, as what we said, when we acquired cashgate. If you move to the next page. A little bit more detail on the products and the markets. Let's start with the personal loan market. So the personal loan market went up in the second year in a row, 6%. If you dig a little bit deeper in the 6%, that's mainly the ticket size have adopt up. So if you look at the number of loans, it went up with 1% or 2%, and the main growth was in the ticket size. Probably the low interest rate environment pushes a higher ticket size, but it was the second year in a row that the market went up after some years of declining in the past. If you look at Cembra, our core receivables in personal loans are up 2%, and including cashgate, was 39%. So why are we only 2% in the market of about 6%? What you typically see with this high ticket-sized loans is that price is very important. So this is a lower price segment. And as you all know, we're not the lowest priced in the market. So I think stable performance. Market share of 44% with fierce competition. I think we could mention that. There's a lot of pressure on price. There's a lot of people who are trying to get share on price. Our loan book are more than 95% repriced. So basically, we are done with the whole repricing. Overall, I think a satisfactory year for personal loans with still a very strong market share. If you look at the auto loans and leases. First, the new cars registrations, so 4% up to 311,000. If you look 10 years back on this market, it is around 300,000, 320,000. So this was an average year. '15 was a very good year. We also had some lower years, but we are basically still on a very stable new registration of new cars level. Also used cars is very stable. If you look at the last 5 years, it's also a market that is actually stable. If you look at the leasing market. The leasing market went up 7%. So the market in leasing is growing faster than the new car registrations. And if you look at the performance of the performance of Cembra, excluding cashgate, we were also up 7%, so in line with the market. If you include cashgate, you're coming to a 48% net financing receivables increase. Market share, 23%, excluding cashgate, very stable at 17% and basically a very strong year. Partnership performing very well. A good year for Honda, Hyundai, Harley-Davidson. E-vehicles is growing. If you look at the market, it used to be 1.7%. Last year, it was 4.2%. Also -- and our portfolio is growing in line with the market. So strong performance on auto loans and leases. And receivables up, excluding cashgate, with 7%, which, in my view, is a very good performance. Credit cards have another strong year. You see the transaction volumes, up 5%. We went to 10% with the cards issues. The market share is now at 14%. So we outperformed the market. Still, all partnership performing very well: Migros, performing very well; Fnac, performing very well; TCS, performing very well. Strong presence in contactless remains as well. We have 21% market share in NFC. So we are quite pleased with another very strong year in the credit cards. If we move to the next page, 2019 key focus areas. I just want to highlight a few of the focus areas of '19 and basically on growth, digitization and product development. If you look at growth, and we talk about cashgate on the next page, so this is all excluding cashgate. We renewed the partnership Fnac, which, I think, is a good thing because we continue to diversify in our credit cards. Also, the LIPO is a new retail partnership which will go live somewhere in this year, but the contract was recently signed. I think also interesting is the cooperation with Migros Bank to develop a new credit card, which will bring us to a different market. Because today, we are typically very active in the retail market with retail customers. Here, we're going to serve the bank, which is a different market, with probably good volumes with lower margins. But basically, it opens up a new market for us. Executing on all the auto partnerships, as I mentioned on the page before. So I'm very happy with basically all the relationships we have. And also, we've doubled the revenue of Swissbilling. So Swissbilling is getting, step by step, scale. If you look at the digital world that we're in. As we announced last year, we want to invest quite a bit in digital. We implemented a new CRM platform. The customer onboarding system is going to be a single system for basically all product lines. We are implementing it as we speak. So we did a piece last year. We're going to do a piece this year. Also, cashgate will be involved in this one. Quite some focus on the mobile-first solution for cards, so self-serving for cards. I think the next step for us in credit cards is really digitizing the whole customer service and being really mobile on credit cards. It will take a bit of time. I don't think we will be live this year. But I think we put a foundation in '19 up there, starting execution in '20, and hopefully, we will have some results in '21 there. Then also investing in paperless office. We're getting more and more digital, and we're spending quite some money in basically a new printing solutions and being more digital. On the product development side, 2 things. First, Cembra Business. So I all invite everybody after this call to just click on the website, the www.cembrabusiness.ch. You will see our value proposition there. We went live with family and friends basically in December. We tested the solution. And the 17th of February, we had -- we go live. So we are live. There's quite a large market, and they're playing there right now. I don't think the goals are changing for Cembra Business when we are live. I think it looks quite nicely. So let's see. It's a bit early to tell you results as we are live only 3 days, but I mean, the first signs look very promising. Then on the Swissbilling side. We signed a contract with localsearch, which is Swisscom, to provide invoice financing for all small enterprises. It's a 5-year contract that will start this year. So that will give Swissbilling even more size, and hopefully, we will keep the growth going onto Swissbilling as well. On the next page, a quick update on the cashgate integration. Basically 3 topics: First is the whole consolidation from branches and offices. Then the second one is the business integration. The third one is the commercial consolidation. On the network, the consolidation, we combined already headquarters in Zurich and Lausanne in December. So basically, all the people who used to sit in the cashgate headquarters, in the [indiscernible] headquarters are sitting with us now. Everything has moved. Then we have still to integrate the Cembra branch and the cashgate branches, which is foreseen for April. And it's fully on track. So we expect to close basically 7 branches in April, May and then go back to 17 branches. If we look at business integration. I think one of the nicest thing that we had was that we almost could maintain all the people from cashgate. So basically, I think 90% of the people signed new contracts and staying with us. They signed. It's closed. They will have their contracts starting the 1st of March. But they're all here and they're all in. And I think we can really maintain a large part of the population, which is what we wanted because we didn't buy cashgate only for the assets but also for the people. The TSA agreements are strong in execution. So I think that's all on track. If you look at what we have to do this year on the single origination system, we also need to include cashgate. So we will have basically all businesses on one, single origination system in the coming years. And then the back end, it will take a bit longer. It will also proceed to take a bit longer. That will happen in '21, '22, when we're basically going to replace our back end for auto and loans. We're also on track if you look at the commercial consolidation. The B2B, which is basically car dealers, brokers, everything has originated on one system. So we are single brand from the 1st of Jan. So basically, if you're a car dealer, there's only one way you can apply for a lease, which is through the Cempra single brand origination system. The same applies for brokers. On the B2C side, the branches are still measurably dual brand until April. Of course, when we integrate all the branches, it's going to be single brand as well. However, we also will have a cashgate online value proposition, where you basically compete on the lower price level with Cembra. And that's going to be live as well. Since the 1st of January, it's going to be live. So what's pending, I think, in general, the whole customer experience and the digital transformation. That will be a journey that will continue for the next 2 or 3 years. With that, I'd like to hand over to Pascal who is going to talk about the '19 financial results.

Thank you, Robert, and good morning, everyone. I'm very pleased to report a very good performance across all businesses with the net income of CHF 159.2 million and EPS of CHF 5.53 for the full year 2019. This is slightly above the range of CHF 5.20, CHF 5.50 we gave with the half year results last summer. We also see a steady revenue growth across all businesses driven by organic and inorganic activities. And I want to remind that the cashgate figures have been included in the Cembra full year results for the last 4 years (sic) [ 4 months ] of the year since the completion of the acquisition on September 2, 2019. The net revenues rose by 9% to CHF 479.7 million or 4% excluding cashgate. The drivers for this 4% organic growth was the solid momentum in auto financing and the continued growth in the credit card business. Interest income grew by 9% as a result of these acquisitions and the higher credit card volumes, and the interest expense was 34% higher at CHF 27.8 million. This is reflecting the CHF 1.8 billion increase in funding and partially offset by lower repricing of term deposits. The commissions and fees income increased by 14%, further 14%. This is influenced again by the acquisitions and thanks to the strong credit cards fee income as well as other income, mainly Swissbilling, related to the invoice financing. As already mentioned by Robert, the solid performance in the credit card business was driven by higher number of cards, plus 10%, that's a number of cards, plus 10% in terms of volumes and plus 16% in terms of number of transactions. The growth of commissions of fees of the credit card business was 9% for the full year, respectively, 11.3% for the first half of this year and 7.5% for the second half of the year. The reductions in the second half of the year was also impacted by the reductions of the Mastercard international interchange fees on purchases made in the European Economic Area. This change do not affect the domestic transactions or the transactions outside the EEA. All these transactions impacted, the average interchange was 1.6% and reduced since October 2019 to 30 bps for point-of-sale transactions and 150 bps for online transactions. The overall impact of this change is expected to be around CHF 5 million on revenues in 2020. Share of the total net revenues generated from commissions and fees increased to 31% compared to 30% last year. The provisions for losses decreased by CHF 5 million despite the expanding loan portfolio, and Volker will later comment on it. The increase in revenues and a very strong loss performance were partially offset by a 20% increase in operating expense and largely attributed to the acquisitions. I will come back later on this point. Finally, normalized for the acquisitions, the net income growth was slightly higher than the net revenue growth. On the next page, net revenue by sources. So the net financing receivables rose by 37% to a record CHF 6.6 billion as a result of the [ acquisition ] of cashgate. Despite the strong competition, as already mentioned by Robert, Cembra organic asset grew, excluding cashgate, was 6%. In the personal loan business, receivables increased by 38% (sic) [ 39% ] respectively, with 2% excluding cashgate. Interest income in the personal loan business increased by 7%, and the yield was 7.5%. The yield of the Cembra portfolio, excluding cashgate, was slightly higher than the 8%, and we expect the combined portfolio to stabilize around 7.5% in 2020. The net financing receivables in auto lease grew by 48% to CHF 2.9 billion in the reporting period, respectively, 7% excluding cashgate. Interest income was 12% higher with the yield of 4.5%. The reductions in yield is due to the change in the business mix of the Cembra portfolio with higher portions of electric vehicles as well as the cashgate incubations. The anticipated yield for this portfolio is to be around 4.5% in 2020. Finally, the net financing receivables from the cards grew by 9%, and the interest income in cards by 11%, with 8% yield expected to be stable in 2020. On the operating expense. So we mentioned earlier the 20% increase to CHF 231.8 million. Personnel expense went up 14%, following additional 180 FTEs in 2019, including 134 employees from cashgate. The general and administrative expense rose by 28%, mainly as a result of the integration of cashgate, together with continued investments in technology and in innovation. Last year, at the same period of the year, we announced that we would invest around CHF 40 million in digitization on product development for the period 2019, 2021, and we incurred CHF 13 million for 2019. The cost-income ratio increased to 48.3%. Excluding the acquisitions and its transactions, integrations costs, the cost/income ratio was 45.5 percentage. On the balance sheet. I already commented the increase in the net financing receivables, and the CHF 1.8 billion increase in funding will be commented later. Increase in other assets is mainly driven by the CHF 141 million goodwill and the CHF 52 million intangible assets estimated at the close of the cashgate transactions. The shareholders' equity increased by 17%, and this is predominantly related to the sale of the treasury shares in July 2019 and the retained earnings for the 2019 period. Let's spend a bit of time on cashgate and the financial impact of the acquisition. As Robert mentioned earlier, we are very pleased with the progress we make with the integrations. And we are on track to deliver the expected CHF 25 million to CHF 30 million incremental income from these transactions, as announced at the time of the transactions in summer last year. Out of the 37% increase in net financing receivables for Cembra Group, 31% -- or CHF 1.5 billion came from cashgate. We incurred in 2019 CHF 8 million of integrations and transactions costs out of the CHF 25 million expected in total for the cashgate integrations. And finally, the normalized net revenues of CHF 27 million were in line with the expectations. The net asset values acquired of CHF 85 million is 31% of the total -- of the purchase price, and this is in line with our estimates disclosed with the half year's results last year. Finally, with the acquisitions, we entered into the committed bridge facility of CHF 1.45 billion and the CHF 150 million mid-term loan. In the meantime, the 1 -- the bridge facility of CHF 1.45 billion has been fully paid off through debt instruments, hybrid, equity and deposits. And for the CHF 150 million syndicated term loan, we paid CHF 25 million. And the remaining debt at year-end was CHF 75 million. On the funding. The funding portfolio raised by 42% or CHF 1.8 billion to CHF 6.1 billion at year-end. And this is, as we mentioned earlier, mainly driven by the capital market transactions mentioned earlier to finance the increase of the net financing receivables from the acquisitions. The weighted-average remaining maturities was 2.9 years, and the period-end funding cost declined from 49 to 44 basis points. We slightly increased our maturity with the refinancing of our acquisitions to take advantage of the current favorable interest rate environment. Finally, the leverage ratio amounted to 12.5 percentage. I would like to hand over to Volker to comment on the provision for losses. Please, Volker?

Yes. Thank you, Pascal, and good morning, everyone. For 2019, I think we can report a quite strong loss performance of CHF 45.1 million, which translates into a loss rate of 0.8%. In comparison to prior years, this is rather low, and it's also largely driven by a one-off effect that was already highlighted during our half year earnings call. This one-off related to a better synchronization of collections and write-off procedures in a particular segment of personal loans, and these are the ones with the longer contractual channels because in this segment, we saw an increasing number of accounts being written off prior to verifying the collectability of the underlying assets. Therefore, then, the moment in time when an account in this segment is charged off, the balance sheet was deferred by 2 months, which gives us now an extended time period to progress on collections activities and specifically also on the debt enforcement, which is a quite powerful tool in the collections process. And by that, we can better check the collectability of these assets. This was implemented in June '19 and consequently led to this one-off effect, which is a timing effect for 2 months as we implemented in June, has been valid for June and July. So it affects both half-year results. But nonetheless, despite the one-off, it's important to highlight that also the underlying loss performance has been quite strong because if we normalize for the one-off and adjust -- look at the adjusted loss rate, we report 0.9%, which is still quite strong compared to the previous years. We have always been oscillating around a loss rate of 1% in the past years, and while 2018 was slightly worse, we now in 2019 see a result that is slightly better, which is probably also a reflection of a strong macro environment in Switzerland in 2019, but probably also a reflection of the diligence and the consistency in our loss mitigation strategies. When it comes to the asset quality, we can report 30-plus delinquencies at 1.8%, which is exactly the same level as the past years. If we normalize that metric for the one-off effect that was mentioned, it actually would have been 1.6%, so slightly better than the last years. Same goes for the NPL ratios. Here, we report a number of 0.6%. But again, if we normalize for the one-off, we would have been at 0.4%. Due to this stability that we have seen, we also -- for the current year, we would not foreseen any deviation from what we have seen in the past years, which leads us then to stating an expectation for 2020 that the loss performance will be in line with prior years. And with that, I hand it then back to Pascal to give an overview on the capital position.

Thank you, Volker. We remain very well capitalized with a solid Tier 1 capital ratio of 16.3%, which is within the 16% to 17% range indicated for 2019 at the time of the acquisitions last year. The risk-weighted assets increased by 36%, in line with the net financing receivables growth. This is a stronger-than-expected increase at the time of the acquisitions, driven by higher receivables from cashgate transactions as well as organic growth. Given Cembra's solid financial performance, the Board of Directors will recommend a dividend of CHF 3.75 per share at the next AGM, which translates into a payout ratio of 68%. Given that the organic growth and the cashgate assets were stronger than expected, and in order to maintain our financial flexibilities, Cembra does not propose to cancel the remaining treasury shares at the next AGM. Thank you for listening. And with that, I would like to hand over to Robert for the outlook for 2020.

Thank you, Pascal. Thank you, Volker. Just to wrap the whole story up. If you look at 2020, I think this is going to be a year that you have to focus on execution, not that we normally don't execute, but I think we do over execute. But I think 2020 is especially a year where we have to deliver on what we basically started in 2019. So one is just to continue to deliver in all business lines. I think we have a very strong core business, and we will continue to deliver in all businesses. So maintain the organic growth and also compensate the pressure on margins and fees by growth. There is pressure on margins. You've seen that on the personal loan side, on the auto side, to be growing also quite a lot. Second priority is really complete the integration of cashgate. Everything is on track. I think we're doing very well. But there's still a lot of work to be done, and we have to finalize as much as we can the integration of cashgate in 2020. The third part is really look at the cards business. We're serving now more than 1 million customers, and more than all of those -- almost -- sorry. We're serving now more than 1 million customers, and a large part of those customers are credit card customers. So we want to further improve the CRM, the self-servicing, be a much better online provider also for cards. We want to develop a new card from Migros Bank, and also looking at new partnerships, again, as always. So I think cards is getting more and more important for us, and we want to try to continue to grow the cards business. Then the fourth one is capitalize on new products. SME is live. SME looks quite nice. I would say, again, try to look at the website afterwards. We want to do this step by step. So there's not a big rush there. We're not going to grow it a lot. But I think on the long term, this is an area of growth that we really see good opportunities. Then execute on the Swissbilling partnership with localsearch. Localsearch is the biggest deal that Swissbilling ever signed. So we need to put it live now in the coming months if we want to execute on really this partnership. The last one is basically a new point but an important point. Sustainability is getting more and more important also for Cembra. So we have now a management board committee on Sustainability. Sustainability is part of the remuneration of management from 2020 onwards. In the annex is a page on sustainability, what we want to do. I think it goes a bit far in this call to really explain what we're doing. But it's going to be a part of our priority for 2020. And really, I recommend you to look at also the annual report, and we will have quite a section on sustainability. If you look at the outlook and guidance. The outlook for 2020, a moderate organic revenue growth and also the full year impact of cashgate acquisition. I think one of the challenges that have, how much of the revenues can be maintained that we got from cashgate. But I think we are good on track there. Strict cost management like always, but is more important, I think, now with the whole cashgate integration. Our forecast of a stable loss performance in line with prior years and an expected 2020 EPS between CHF 5.75 and CHF 6.05. Looking at the medium targets: ROE remains above 15%; the Tier 1 capital of 17%; the dividend payout remains unchanged at 60% to 70% and return excess capital above 90%; and then as we promised mostly at the acquisition of cashgate, we still have in our goals very strongly incremental net income of CHF 25 million to CHF 30 million expected from the cashgate acquisition and a cost-to-income ratio below 44%. With that, I will hand it over to the questions. And we're happy to answer all your questions.

[Operator Instructions] The first question comes from Andreas Venditti from Vontobel.

Actually I have quite a number, but I will limit myself to a few and then maybe ask a few more later. First one, on the cashgate. I think you mentioned it, Robert. One of the challenges will be to maintain, obviously, as much as you can of the business. When you acquired, obviously, you said some volume losses will be normal. Can you be a bit more specific what you see there in terms of what the agents are doing, for example, and what that might mean for this year? Next one, in terms of the restructuring costs. I think CHF 17 million remain. Will this be fully booked this year? Or is there going to be also some in future years? Then maybe a smaller one on the sale of the rental guarantee business. Was there any significant impact on the numbers for last year? And maybe one for Volker. In terms of the expected loss, the change of the accounting to this, anything you can see already of any impacts?

Okay. What we will do, I will take the cashgate question. I will also take the sale of the rental guarantee question. I'll give the restructuring costs to Pascal, and of course, Volker, you'll get the last question. So cashgate, yes, it's a good question, Andreas. It's also a difficult question. What we do is basically we combined all the brokers, all the agents into one channel and also all the dealers in one channel. And even the personal loan present for cashgate is going to be a dual channel. On the agent volumes, I think it looks okay. But you don't know how aggressive competition is going to be and if you're going to lose something. We will lose something. I'm pretty sure. It's almost impossible to say -- it is impossible to say, not almost, it is impossible to say how much we're going to lose. On the auto side, we also will lose something. And if you want a sample, Tesla, for example, Tesla always works with 2 suppliers, that was Cembra and cashgate. They have engaged with a second supplier, which is a bank, now as well. So there are 2 suppliers again, which is completely in line with the European policy. The question is, are we going to get 90%? Are we going to get 70%? Are we going to have 50% of that volume? It's difficult to say because it's the customer that's going to choose at the end of the day. So it's difficult to give you more color on this one. But we will lose some revenue. No numbers, unfortunately. Pascal, on the restructuring?

Yes. So out of the remaining CHF 17 million, we expect around 2/3 to be P&L impact in 2020 and then 1/3 for later.

On the sale of the rental guarantee business, there was basically no P&L impact in 2019. The reason that we want to sell it, it's not a core business for us. It was mostly a subscale business line that we didn't think we could develop really significantly. So we sold it with no P&L impact in 2019. Volker?

Yes. And on the question about the losses, I want to actually answer it in 2 directions: one is to give you an overview about what we expect for 2020; and one also kind of rather going into what I think you are after, more insight about the accounting piece of it when it comes to expected losses going forward and what will change there. So on the 2020 loss performance, since we have been seeing over the last couple of years always a number, a loss rate that is around 1%. We want to stay kind of consistent and prudent, and also for 2020 wouldn't expect any major moves because we haven't changed our credit risk appetite massively. There are always a few pieces that move up and down, but I think we have a robust estimate by saying that we will be in line with prior years. When it comes to the accounting piece and the expected loss concepts that are currently discussed, there was recently, a couple of months ago, an update from the financial accounting stability board (sic) [ Financial Accounting Standards Board ] in the U.S. that said that the implementation of the new U.S. GAAP was around the CECL standard, that they are kind of postponed by 2 years. So for us, They first become effective in 2023. So it's far too early to give an update on what it means impact-wise for us because the FASB also kind of granted this extension period to give banks, especially small banks, the opportunity to monitor what now the larger banks are doing in terms of disclosure and reporting.

The next question comes from Flora Benhakoun from Deutsche Bank.

Yes. I'll stick to just a few questions for now as well. The first question I wanted to ask is regarding the interest expense, which was a bit higher than expected here. And I just wanted to understand if this is kind of a one-off because of the, maybe, higher cost of the bridge facility that you had to quickly cover over the half year, or if we should consider that this is maybe a more normal number that we should also expect for the outer year. The second question is regarding the credit card fees. So I understand you've guided for a CHF 5 million hit in 2020 from the lower interchange fees. Shall we still expect a small growth in credit card fees year-on-year, namely the number of new credit cards and transactions would slightly more than offset that negative on the interchange fee? Then a question on the SME lending. I think you have started already a little bit so I wanted to ask you how much you did. And any commentary you have around your feeling, having started with SME lending? And maybe as a last question here, if you could elaborate a little bit on what you intend to do on the card with Migros Bank. When do you think this is going to be launched and when this would contribute to the P&L?

Thank you, Flora. I have a lot of questions for me. But the first one, at least, goes to Pascal on the interest expense.

So clearly, out of the CHF 27.8 million interest expense, so we had a few one-offs related to the bridge facilities, particularly the participation fees. But in total look, though, we disclosed in the funding part in the slides the reductions in the cost of funding for 49 basis points to 44 basis points. And I would say, everything which is below 50% is always basically very good numbers. So yes, there are a few one-offs. And ultimately, the cost of funding is around 50% or slightly below is a good number associated in 2019 despite this one-off.

On the credit card fees, it's a good question. It's also not an easy question. Yes, we expect a CHF 5 million hit, but also we're growing quite a lot on credit cards. So I think you can expect growth in credit cards. I cannot give you the number, of course, but you can expect growth. You won't see the growth, the big double-digit growth numbers anymore because of this, no. But I think if you look at the production we have for the number of cards going that we're going to do in the budgets and in the number of customers we're going to sign up, I think you clearly can expect growth on the credit card fees again in 2020. Quickly on the SME lending. We did some friends and families. So we basically had the website opened only for 1 partner to see and just to get some experience with the first applications. We did a few applications. We did a few numbers. They're not big numbers yet. I think it's early to say because we are open now since Monday. We've got quite a few applications in the first week. We work both through partners and through our own website. So we also have signed up quite some partners from agents or brokers or whatever you call it, insurance companies who can bring us leads as well. And we also have a marketing campaign live now. So it's really early days. We booked a few contracts already in the system. So we have some volume in the system. I think at the half year results, I can give you really some more flavor where we are. Your last question, Flora, on the Migros Bank credit card. I think we're going to be live with Migros Bank at Q3, Q4 this year with the first product. That's basically as far as we see now what we can do. So you won't see a lot of impact in 2020. I think long term, it's a pretty interesting value proposition because what we do is we're going to service the cards for a bank. So today, we service cards for the retailer. So basically, the assets in our book, the retailer is really our customer and the end customer is our customer. If you're going to service credit cards for bank, the assets probably is going to be on the book spend, and you're getting a service fee for basically serving that credit cards. So that means that you don't need any capital to do this one, you can just get service fees, but also, lower margins on these cards because you don't have the assets, you don't have interest expense on the assets as well. I think it opens a new market for us where we have been quite refocusing on retail. And this really could bring us into the banking world. Let's see how this goes. But the first customer is there, and this is certainly something that we want to explore more in the future.

The next question comes from the line from Michael Kunz from ZKB.

I have a question regarding the Swissbilling cooperation with localsearch. Could you elaborate a little bit how that works in practice? Do the companies that look for an invoice financing find advertising banner on the localsearch page? Or kind of how do you bring the match together?

Yes. Okay. Only one question, Michael, so that's good.

I could add another one regarding the Migros Bank cooperation.

Yes. Go ahead.

Is your ambition to kick out Viseca/Aduno completely out of the Migros Bank? Or do people get an option when they bank with Migros Bank which card they want? Or kind of how should that work in practice?

Okay. That's 2 questions for me, I guess. So first, the Swissbilling localsearch deal. I think it brings Swissbilling into a bit of a different league because it's not factoring anymore, it's basically billing services. So we're doing the whole billing and the collections for localsearch. It's not going to be immediately in the banner that says "Go to Cembra Business afterwards". But I think it gives us quite some addresses and some possibilities also to target customers from localsearch with other small SMEs. So basically what we're going to do is from, I think, the 1st of April now, we're going to do all the billing for them. It's not going to be big banner immediately, but I think it gives us access to quite a large customer base. And depending on how Cembra Business is going to develop, this could be another source of bringing leads in. The Migros Bank cooperation, it's never my ambition to kick out somebody completely. I think what we want to do with Migros Bank is we want to bring a very competitive card, which also happens to benefit from all the Migros advantages. So no annual fee, Cumulus points, these kind of things. And I think Migros is going to push the new customers to our cards. I mean that's probably what we want to do. What they do with the existing book, that's something completely to Migros Bank. That's not really what we should look at.

The next question comes from the line of Máté Nemes from UBS.

I have 2 questions, please. First one perhaps for Robert. If you could give us perhaps a little bit of an outlook on the personal loan market and also on autos. Those clearly had a very strong period with a 7% growth. How sustainable do you see that? Shall we expect some reversion to NIM perhaps or another good year in 2020? And in personal loans, did you think this trend of larger ticket sizes is still ongoing? And the second question for Pascal. In the context of the CHF 5.75, CHF 6.05 guidance, I'm just wondering how shall we think about the cost base for 2020. I hear you on the integration charges, but perhaps, excluding that bit, if you could give us a bit of sense how the cost base should develop, and also in the context of a somewhat higher D&A and the digitization program?