Ladies and gentlemen, welcome to the full-year results 2019 conference call and live webcast. I am Sandra, the call's call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Mr. Robert Oudmayer, CEO. Please go ahead.
Thank you, Sandra. 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 three sections before we go to questions. First, I'll give you some highlights, then Pascal and Volker will run you in detail through the 2019 financial results, and I will come back for the strategy and outlook. If you go to page three 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 553. Total receivables up, as you can see, at 37%, with strong growth in auto and cards.
Revenues up 9%, which is basically driven by card fees, plus 9%, and the acquisition of cashgate, which also only gives you four months of revenue, in 2019. Loss rate stronger than in the past with 0.8%. Volker will comment later in the deck on the reasons for this. A little bit higher cost income, which are mainly driven by the acquisition of cashgate. Pascal will comment later on the cost-income ratio. ROE was at 15.7% with a solid Tier 1 capital ratio of 16.3%. We proposed a CHF 3.75 dividend stable, despite the acquisition of cashgate. The line is 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.
The personal loan market went up in the second year in a row, 6%. If you dig a little bit deeper into 6%, it's mainly the ticket size that went up. If you look at the number of loans, it went up, basically, one or 2%, and the main growth was in the ticket size. Probably the low interest rate environment pushes a higher ticket size. 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 went up 2%, and including cashgate was 39%. Why we only 2% in the market, about 6%? What you typically see with these high-ticket size loans is price is very important. This is a lower price segment.
As you all know, we're not the lowest priced in the market. 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 and a lot of people who are trying to get share on price. Loan book are more than 95% repriced. 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 car registrations. 4% up, 311,000. If you look 10 years back on this market, it is around 300,000, 320,000. This was an average year. 2015 was a very good year.
We also had some lower years, we are basically still on a very stable new registration of new cars level. Used cars, very stable. If you look at the last five years, it's also a market that is extremely stable. If you look at the leasing market, the leasing market went up 7%. The market in leasing is growing faster than the new car registrations. If you look at the performance of Cembra, excluding cashgate, we were also up 7%. In line with the market. If you include cashgate, you're coming to a 48% net financial receivables increase. Market share, 33%, excluding cashgate, very stable at 70%. 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%.
In our portfolio, it's growing in line with the market. Strong performance on auto loans and leases and receivables up, excluding cashgate, at 7%, which in my view is a very good performance. Credit cards had another strong year. You see the transaction volumes are at 5%. We went up 10% with the cards issues. The market share is now at 14%, so we're outperforming the market. All partnership performing very well. Manor performing very well. Fnac performing very well. TCS performing very well. Strong presence in contactless remains as well. We are at 21% market share in NFC. We are quite pleased with another very strong year in the credit cards. If you move to the next page, 2019 key focus areas. I just want to highlight a few of the focus areas of 2019. Basically on growth, digitization, and product development.
You look at growth, and we talk about cashgate on an expate. This is all excluding cashgate. we renewed the partnership with Fnac, which I think is a good thing because we continue to diversify in our credit cards. 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. Today we are typically very active in the retail market with retail customers. Here we come 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 other partnerships, as I mentioned on the page before, so very happy with basically all the relationships we have. Also, now double 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're 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-servicing 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. I think we put a foundation in 2019 up there, starting execution in 2020, and hopefully we will have some results in 2021 there. Also investing in paperless office. We're getting more and more digital, and we're spending quite some money in basically new printing solutions and being more digital. On the product development side, two things. First, Cembra Business. I 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. The 17th of February we had a big go live.
We are live. There's quite a large marketing campaign out right now. I don't think the goals are changing for Cembra Business, but we are live. I think that looks quite nicely. Let's see. It's a bit early to tell you the results as we are live only three days, but the first signs look very promising. On the Swissbilling side, we signed a contract with localsearch, which is Swisscom, to provide invoice financing for all small enterprises. A five-year contract that will start this year. That will give Swissbilling even more size and hopefully will keep the growth going on Swissbilling as well. On the next page, a quick update on the cashgate integration. Basically, three topics. First is the whole consolidation from branches and offices. The second one is the business integration, the service, the commercial consolidation.
On the network, on the consolidation, we combined already headquarters in Zurich and Lausanne in December. Basically all the people who used to sit in the cashgate headquarters, the Aduno headquarters, sitting with us now. Everything is moved. We have still to integrate the Cembra branches and the cashgate branches, which is foreseen for April, and it's fully on track. We expect to close basically seven branches in April, May, and then go back to 17 branches. 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. 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, they're all here and they're all in. 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 on execution. 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. We will have basically all businesses on one single origination system in the coming years. The back end, it will take a bit longer, will also proceed to take a bit longer. That will happen in 2021, 2022, when we basically got to replace our back end for auto loans. Also on track. Look at the commercial consolidation.
The B2B, which is basically our car dealers, brokers, everything is originated on one system. We are single brand from the 1st of January. Basically if you're a car dealer, there's only one way you can apply for a lease, which is through the Cembra single brand origination system. The same applies for brokers. On the B2C side, the branches are still basically dual brand till April. Of course, when we integrate all the branches, it's going to be single brand as well. We also will have a Cashgate Online value proposition where we basically compete on the lower price level with Cembra. That's going to be live as well. Since the 1st of January, it's going to be live.
We're spending, I think in general, the whole customer experience and the digital transformation, that will be a journey that will continue for the next two or three years. With that, I'd like to hand over to Pascal, who's going to talk about the 2019 financial results.
Thank you, Robert, good morning, everyone. I'm very pleased to report a very good performance across all businesses with the net income of CHF 169.2 million and EPS of CHF 553 for the full-year 2019. This is slightly above the range of CHF 520-CHF 550 we gave with the half year's results last summer. We also see a steady revenue growth across all businesses driven by organic and inorganic activities. I want to remind that the cashgate figures have been included in the Cembra full-year results for the last four years of the year since the completions of the acquisitions on September 2nd, 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.
The interest income grew by 9% as a result of these acquisitions and the higher credit card volumes. 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%. 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, + 10% in terms of number of cards, + 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 the 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, the 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. For these transactions impacted, the average interchange was 1.6% and reduced since October 2019 to 30 basis points for point of sales transactions and 150 basis points for online transactions. The overall impact of this change is expected to be around CHF 5 million on revenues in 2020. The 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. Volker will later comment on it. The increase in revenues and the 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. The net financing receivables rose by 37% to a record CHF 6.6 billion as a result of the consolidations of cashgate. Despite the strong competitions, as already mentioned by Robert, Cembra organic assets growth excluding cashgate was 6%. In the personal loan business, receivables increased by 38%, respectively at 2% excluding cashgate. Interest income in the personal loan business increased by 7%. The yield was 7.5%.
The yield of the Cembra portfolio, excluding cashgate, was slightly higher than the 8%. 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 a 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 integrations. The anticipated yield for this portfolio is to be around 4.5% in 2020. The net financing receivables on the cards grew by 9%. The interest income in cards by 11%, with 8% yield expected to be stable in 2020. On the operating expense, we mentioned earlier the 20% increase to CHF 231.8 million.
Personnel expense went up 14% following addition 180 FTEs in 2019, including 134 employees from cashgate. The general and administrative expense rose by 28%, mainly as a result of the integrations 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 digitizations and 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 cost, the cost-income ratio was 45.5%. 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 shareholder's equity increased by 17% 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-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 cost out of the CHF 25 million expected in total for the cashgate integrations. 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, this is in line with our estimate disclosed with the half-year 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 bridge facility of CHF 1.45 billion has been fully paid off, through debt instruments, hybrid equity, and deposits. For the CHF 150 million syndicated term loan, we paid CHF 75 million, and the remaining debt at year-end was CHF 75 million. On the funding, the funding portfolio rate by 42% or CHF 1.8 billion to CHF 6.1 billion at year-end. 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 maturity 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%. I would like to hand over to Volker to comment on the provision follow-up. Please, Volker.
Yeah. Thank you, Pascal. 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 tenors. Because in this segment, we saw an increasing number of accounts being written off prior to verifying the collectibility of the underlying assets.
The moment in time when an account in this segment is charged off the balance sheet was deferred by two 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. By that, we can better check the collectibility of these assets. This was implemented in June 2019, and consequently led to this one-off effect, which is a timing effect for two months. As we implemented in June, it's been valid for June and July, so it affects both half-year results.
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 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. 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+ delinquencies at 1.8%, which is exactly the same level as the past years.
We normalize that metric for the one-off effect that was mentioned, it actually would have been 1.6%, slightly better than the last years. Same goes for the NPL ratios. We report a number of 0.6%, again, if we normalize for the one-off, we would have been at 0.4%. Due to the stability that we have seen, we also for the current year, we would not foresee 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. 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 the solid Tier 1 capital ratio of 16.3%, which is within the 16%-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, 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.
With that, I would like to hand over to Robert for the outlook 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 always execute, but I think 2020 is especially a year where we have to deliver on what we've basically started in 2019. 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. 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, there's still a lot of work to be done, 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, a large part of those customers are credit card customers. We want to further improve the CRM, the self-servicing, be a much better online provider also from cards. We want to develop the new card for Migros Bank also looking at new partnerships again, as always. I think cards is getting more and more important for us, we want to try to continue to grow the cards business. The fourth one is capitalizing new products. SME is live.
SME looks quite nice, I would say. Try to look at the website afterwards. We want to do this step by step. There's no 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. Execute on the Swissbilling partnership with localsearch. localsearch is the biggest deal that Swissbilling ever signed. We need to put it live now in the coming months, and we want to execute on really this partnership. The last one is basically a new point, but also an important point. Sustainability is getting more and more important also for Cembra. We have now a management board committee on sustainability. Sustainability is a 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 priorities for 2020. Really, I recommend you to look at also the annual report, where 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 we have, how much of the revenues can we maintain that we got from cashgate, but I think we are good on track there. Strict cost management like always, but even more important, I think now with the whole cashgate integration.
A focus at a stable loss performance in line with prior years and an expected 2020 EPS between 5.75 and 6.05. Looking at the medium targets, ROE remains above 15%, the Tier 1 capital of 17%, the dividend payout remains unchanged at 60%-70%, return excess capital above 90%. As we promised, basically 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-income ratio below 44%. With that, I will hand it over to the questions, and we're happy to answer all your questions.
We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. The first question comes from Andreas Venditti from Vontobel. Please go ahead.
Yes. Thank you for taking my questions. Actually, I have quite a number, 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, is there going to be also some in future years? Anything you can say already of any impacts? Thank you.
Okay. What we will do, I will take the cashgate question, I will also take the sales rental guarantee question. I give the restructuring costs to Pascal. Of course, Volker, you get the last question as per scene. cashgate. Yeah, it's a good question, Andreas. Also a difficult question. What you do is basically we combined all the brokers, all the agents into one channel and also all the dealers in one channel. 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 is impossible to say how much we're going to lose. On the auto side, we also will lose something. I'll give you one example.
Tesla, for example, Tesla always works with two suppliers. There was Cembra and cashgate. They have engaged with the second supplier, which is bank-now as well. There are two 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 get 50% or of that volume? It's difficult to say because it's the customer that's going to choose at the end of the day. It's difficult to give you more color on this one. We will lose some revenue. No numbers, unfortunately. Pascal, the restructuring.
Yep. 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 we want to sell it's not a core business for us. It was a sub-scaled business line that we didn't think we could develop really significantly. We sold it with no P&L impact in 2019. Volker.
Yeah. On the question about the losses, I want to actually answer it in two 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 an insight about the accounting piece of it when it comes to expected losses going forward and what will change there. On the 2020 loss performance, since we have been seeing over the last couple of years always a number loss rate that is around 1%, we want to stay 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 Standards Board in the U.S. that said that the implementation of the new U.S. GAAP, which was around the CECL standard, that they are postponed by two years. For us, they first become effective in 2023. It's far too early to give an update on what it means impact-wise for us, because the FASB also 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 Bocahut from Deutsche Bank. Please go ahead.
Yes, good morning. 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. 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-over-year? Namely, the number of new credit cards and transactions would slightly more than offset that negative on the interchange fees.
A question on the SME lending. I think you have started already a little bit, so wanted to ask you how much you did and any commentary you have around your feeling having started with SME lending. 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.
Thank you, Flora. You have a lot of questions for me, but the first one at least go to Pascal on the interest expense.
Clearly, out of the CHF 27.8 million interest expense, we had a few one-offs related to the bridge facilities, particularly the participations fees. In total, look, we disclosed in the funding part in the slides, the reductions in the cost of funding for 49 basis point to 44 basis points. I would say everything which is below 50% is always basically a very good numbers. Yes, there are a few one-offs, ultimately, although the cost of funding is around 50 basis points, 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. I think you can expect growth from credit cards. I can't 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. I think if you look at the projection we have for the number of cards that we're going to do in the budget 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 family, so we basically had the website open only for one partner to see and just to get some experiences with the first applications. We did a few applications. We did a few numbers, are not big numbers yet. I think it's early say because we are open now since Monday. We 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, some agents or brokers or whatever you call it, insurance companies, who can bring us leads as well. We also have a marketing campaign live now. 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 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. You won't see a lot of impact in 2020. I think long-t erm, it's a pretty interesting value proposition because what we do is we're going to service the cards for a bank. Today we service cards for a retailer. Basically the assets in our book, the retailer is really our customer, the end customer is our customer.
If you're going to service credit cards for a bank, the asset's probably going to be on the books bank, and you're getting a service fee for basically serving their credit cards. That means that you don't need any capital to do this one. You get your service fee, also lower margins on these cards because you don't have the assets, you don't have the interest expense on the assets as well. I think it opens a new market for us where we have been quite focusing on retail. This really could bring us into the banking world. Let's see how this goes, the first customer is there, this is certainly something that we want to explore more in the future.
Thank you.
The next question comes from the line from Michael Kunz from ZKB. Please go ahead.
Yeah, good morning. I have a question regarding the Swissbilling cooperation with the localsearch. Could you elaborate a little bit how that works in practice? Do the companies that look for an invoice financing find a advertising banner on the localsearch page or kind of how do you bring the match together?
Yeah. Okay. Only one question, Michael. That's good.
I could add another one regarding the Migros Bank cooperation.
Yeah, go ahead.
Is your ambition to kick out Viseca/Aduno completely out of the Migros Bank? Do people get an option when they bank with Migros Bank, which card they want, or how should that work in practice?
Okay. That's two questions for me, I guess. First, the Swissbilling localsearch deal. I think it brings Swissbilling, it put a bit of a different league because it's not factoring anymore, it's basically billing services. We're doing the whole billing and the collections for localsearch. It's not going to be immediately in the banner that say now go to Cembra Business afterwards, I think it gives us quite some addresses and some possibilities also to target customers from localsearch who are the small SMEs. Basically what we're going to do is from, I think the 1st of April now, we're going to be do all the billing for them. It's not going to be big banners immediately, I think it gives us access to a quite a large customer base.
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. No annual fee, Cumulus points, these kind of things. I think Migros is probably going to push their new customers to our cards. I mean, that is probably what we want to do. What they do with the existing book, that's up to completely to Migros Bank. That's not really what we should look at.
Okay, thanks.
The next question comes from the line from Mate Nemes from UBS. Please go ahead.
Yes, good morning. I have two 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. In autos, you clearly had a very strong period with the 7% growth. How sustainable do you see that? Shall we expect some reversion to the mean perhaps or another good year in 2020? In personal loans, do you think this trend of larger ticket sizes is still ongoing? The second question for Pascal, in the context of the CHF 575, CHF 605 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 the somewhat higher D&A and the digitization program. Thank you.
Mate on the personal loan side, I think the trend of larger ticket size will continue, clearly. I think one of the reasons that we put in Cashgate Online in there is that we can target now with a different value proposition, larger ticket sizes. Until today, our pricing is 79%-99%, and the larger ticket sizes are clearly below that price, the real large ticket size. I think with Cashgate Online, the customer have less service, but they can get a better price, and we also will not going to basically jeopardize the Cembra brand. With Cashgate Online, I think we can target this market a bit better, because clearly we see a trend moving to larger ticket sizes and pressure on margins. On auto, I think 7% growth on assets is amazing.
Really, because normally you need to do a lot of volume growth to get asset growth in there. You know the asset for an auto asset is about three years on the book. If you do 7% asset growth, that's quite a bit. I don't think we can repeat the 7% asset growth. Also, you combine Cembra and cashgate in the auto book. I can't tell you what it is going to be in 2020, but I would be very surprised if we would have another 7% asset growth in 2020. Pascal?
Yep. Thank you, Mate. On the expense, on the cost-income ratio, though, we disclosed, basically, we reported a 48.3% of cost-income ratio for 2019. I think about the future, including cashgate integrations, investments. We also said that we expect the synergies realization from the transactions in 2021. Basically, we also expected then the P&L impact from these synergies in 2021. We clearly have guided that we want by 2021, the cost-income ratios are around 44%, ideally it will be lower than 44%. I think the 2020, if you take 48.3% as what we reported 2019, 2021 as our target to 40/40, clearly as of 2020, this year, we still have quite significant investments related to the one-off investments related to the acquisitions.
I would say a little more closer to the 48 than to the 44 in 2020.
Thank you. That's very helpful.
The next question comes from the line from Andreas Brun from Credit Suisse. Please go ahead.
Hello. In personal loans, can you quantify the organic yield pressure in 2020? In credit cards, how fierce is actually currently the competition from fintech companies like, for example, Revolut? Lastly, we had that international interchange rate reduction in 2019. Was this the main reason that commission income per card did not grow anymore in 2019? What are your expectations for the current year regarding commission income per card? Thanks.
Thank you, Andreas. At least you have a couple of questions for Pascal in here. The organic yield pressure. It is difficult to say now. We are now at a 7.5% yield on the personal loan side. Normally, I would give you quite a clear answer, but with the whole cashgate integration and the whole new Cashgate Online value proposition we're going to have, it's going to be really difficult to talk about volumes and yields moving forward. I think we're well positioned. I think we will perform well. It is difficult to say because you will have some impact of Cashgate Online. If you get a lot of high ticket size, you probably get some high volumes, but then you get probably a bit of lower yield. You get a bit of a higher yield, a lower volume. It's one or the other.
It's difficult to give you more color around this one, honestly. Normally I would love to do it, but I don't really know the answer here completely. On the credit cards, on the fintech side, honestly, we don't feel it too much. I think if you look at our customer base, our customer base is basically by large, the Migros customer. The Migros customer is not a frequent traveler. I think Revolut is the only one that you could feel a little bit, I think. Revolut is the only one that is a frequent traveler customer. I don't think we see a lot of traction there at the moment. I think it will maintain the pressure on fees, because I think everybody knows about this, but I don't think we lose a lot of customers there.
Also, I think if you look at Revolut, the value proposition of Revolut is completely different than ours. We have a credit card. Basically, Revolut is still a prepaid debit card, and there's no asset there's no interest income there. I think it's also a different value proposition there. On interchange, Pascal, you want to say a few words there?
Look, ultimately, yes, the lower growth that we have seen in the second half of the year is mainly driven by the lower interchange, the international interchange fees. Yes, that's the response here.
The next question comes from the line from Daniel Regli from Octavian. Please go ahead.
Hello. Good morning. Thanks for taking my question. Actually, my question goes a little bit in the same direction of one of the questions from Andreas. With risking that you give me the same answer, I wanted to ask on the yield guidance. Obviously, as I understood you gave a yield guidance of being roughly stable at the current yields for 2020 versus 2019, and I was just wondering how this is possible given that you have the whole cashgate integration, which obviously is at the lower yield than your Cembra book now coming in for the full-year. If you just can give me some kind of idea where.
Let me give the question to Pascal, maybe you get a different answer than me. I don't hope so, but I think it's the same answer, but I'm giving it to Pascal.
Ultimately, ideally we expect to be around 7.5% for the year 2020. I think it's also important to mention that in 2019, what we report here, there were quite a few of the one-offs. The impact of the cashgate ultimately are the drivers from one-off. If we would exclude cashgate, as I said before, the yield would be slightly higher than the 8%, which is exactly in line with what we said several times and for 2019.
Excluding cashgate would be around eight, now we expect, basically with the cashgate integration, to go down to 7.5%. We mentioned several times, ultimately, the cashgate portfolio was always the different profiles with lower pricing and to some extent, lower risks.
I think it's a matter of either you do more volume and you do higher ticket charges, lower yield, either you do basically higher yield and less volume. I think we need to make a judgment every time that we speak. You won't see a big difference in the yield. If the yield will go down a bit, you should see more volume, so to be compensated. I think that is probably the judgment you have to make every time. I think that also with the insecurity you see when you launch Cashgate Online, are you really able to attract at a pretty low cost base, a lot of high ticket sizes, and you might give up a little bit on the yield or are you not going to, and then you get a bit better yield and lower assets probably.
I think it should be quite neutral in there, honestly.
Okay. Just maybe to clarify the number you give on slide nine to 7.5% on personal loans and auto leasing loans at 4.5%. Are these exit yields or is this the average yield for the year?
These are the two points average yield. No adjustments.
Okay.
The next question is a follow-up question from Andreas Brun from Credit Suisse. Please go ahead.
One last question from my side. On page 11, you mentioned a timing effect from repayments in credit cards in December. Is this a recurring thing and/or could you elaborate on that point, please?
This is something for Volker.
Yeah. What we mean here by timing effect is that we see a pattern of our customers that they are typically paying on weekends, on Saturdays when they go to the post office and go with their invoice and pay the bill. Now, the December of 2019 was in such a case that people received their salary payments prior to Christmas, which gave them very much time, a lot of time to go to the post office and repay, which obviously has been driving the repayments, very late repayments in the month, which then leads to a slightly reduced asset base than we otherwise would have had. It's rather around the timing of the calendar, what we mean by that.
It doesn't have an impact on interest income because this is basically a part of the asset that don't yield any interest income.
Exactly.
If you look month by month for the credit card assets, you see quite some fluctuation, how the end of the month is basically how it fits. Sometimes you see it's going up a bit, sometimes it's going down a bit. I think for December it was, for the customer, a good month. For us, probably not a good month because it fitted very well, and they could do quite some repayments. Then you easily see CHF 100 million-CHF 200 million differences on credit cards, or CHF 50 million, CHF 100 million difference of credit cards. Correct, Volker?
Yeah. It's rather around CHF 50 million, I would say, because there is obviously also a stable base on interest-bearing assets. You're absolutely right. Typically, the repayments are coming in on the interest-free asset side of the transactions.
Yeah.
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I would like to thank you for a very lively call. I think it's the first time in a couple of years that we used really the full hour. I think the business is growing. It's getting more complex. A lot of things happened in 2019. We're looking forward to a great 2020. Thank you really for all your attention. Thank you. Bye-bye.
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