Cembra shares rise after $1.1bn flotation

Cembra Money Bank floated on the Zurich stock exchange with a market valuation of SFr1.53bn ($1.7bn), the second-largest European bank IPO since the financial crisis.

The heavily oversubscribed IPO of Cembra - formerly GE Money Bank - was priced at the top of its price range of SFr43 to SFr51 and raised $1.1bn for the selling shareholder, GE Capital.

This is the third-biggest European IPO this year after Royal Mail and German residential landlord LEG Immobilien - the previous largest bank flotation was of Spain's Bankia in 2011, which raised €3bn.

Its shares rose by 2 per cent in early trading to SFr56.20.

Richard Laxer, president and chief executive of GE Capital International, said Cembra was positioned strongly for the future and GE Capital would continue to have a significant interest in the bank.

"This move is another important step in focusing GE Capital's operations and is consistent with GE's broader strategy to shift its earnings mix to approximately 70 per cent industrial and 30 per cent financial," he said.

Sixty per cent of the company's shares were placed by a syndicate consisting of Credit Suisse as the sole global co-ordinator and joint bookrunner, together with BofA Merrill Lynch and Deutsche Bank as joint bookrunners and Bank Vontobel as co-lead manager.

GE Capital has also granted the banking syndicate an overallotment option, representing approximately 13.9 per cent of the shares offered, which can be exercised until November 29.

The free float will amount to 60 per cent of the shares before exercise of the overallotment option and approximately 68.3 per cent if the overallotment option is exercised in full.

Headquartered in Zurich, Cembra operates almost exclusively in Switzerland through a nationwide network of 25 branches, serving approximately 618,000 customers. It generated a net income of SFr133m in 2012.

GE Capital entered Switzerland with the acquisition of Bank Aufina in 1997 and Bank Prokredit in 1998, respectively founded in 1953 and 1912.

In 2006, GE Capital brought the consumer credit business together under the GE Money Bank brand. In view of the listing, the company recently changed its name to Cembra Money Bank.

Institutional investors bought 84 per cent of the IPO shares with the remainder going to retail investors and private banks.

The geographical split of shareholders was: UK 37 per cent, Switzerland 31 per cent, US 19 per cent and rest of world 13 per cent.

Robert Oudmayer, chief executive of Cembra, said: "We are proud of the successful placement of our shares and the strong investor interest in our company. We welcome our new shareholders and look forward to continuing our journey with them as an independent company."

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