Cembra Says Suit Lacks Basis While Setting Aside Funds for FinmaJeffrey Vögeli
Cembra Money Bank AG, a Swiss consumer finance company, said a civil suit by a former agent lacks legal founding as it set aside money to cover the costs of a related regulatory probe.
Finma, the Swiss Financial Market Supervisory Authority, is investigating the lender over the allegations made by the agent. Cembra made a provision of 3 million Swiss francs ($3.3 million) for the Finma probe, which it expects to be completed in the fourth quarter.
“The group is convinced that the claim of the former agent made in such civil litigation lacks proper legal basis and, hence, is without merit,” Cembra said today. “We look forward to the conclusion of the process with great interest,” Brigitte Kaps, a spokeswoman for Cembra, said by phone.
The company’s shares dropped as much as 12 percent the day the lawsuit was first reported on in July, the biggest drop since Cembra started trading in Zurich in October. The stock has since gained 4 percent to 53.60 francs, including a 1.1 percent gain today, valuing the lender at 1.6 billion francs.
Cembra, formerly known as GE Money Bank, was spun off from General Electric Capital Corp.
The bank said today net income dropped 26 percent in the first half after a one-time gain on the sale of a portfolio of loss certificates in 2013. The Zurich-based lender earned 64.7 million Swiss francs compared with 87.7 million francs in the the year-earlier period.