EFG International, the Swiss bank that has spun off a number of offices and operations to boost its profitability, logged an IFRS net loss of SFr294.1 million (around $328.7 million), narrowing from a comparable loss of SFr721.8 million a year ago.

Net profit, excluding exceptional items, fell 27 per cent year-on-year to SFr83.5 million in 2011, the bank said in statement today.

Results indicated that EFG, which has been in the throes of a heavy restructuring move to streamline its business, has work to do: its cost/income ratio rose from an already-high 85.2 per cent in 2010 to 91.6 per cent in 2011. That compares, for example, with a ratio of around 80 per cent for Barclays Wealth, the UK-based firm.

“EFG International remains committed to delivering net new assets in the range 5-10 per cent; a reduced cost-income ratio (to below 75 per cent in the next three years); and an annual IFRS net profit of SFr200 million within three years,” the firm said.

Revenue-generating assets under management fell 8 per cent to SFr78.4 billion; net new assets from continuing businesses were SFr600 million. There was a fall in net new assets with a negative figure of SFr1.2 billion, down from SFr9.7 billion in 2010.

EFG had a BIS Capital ratio of 12.9 per cent in 2011, down from 14 per cent a year earlier. The number of client relationship officers (CROs) stood at 567 at end 2011, down from 675 a year earlier. There is a hiring freeze across the business that is to remain “until further notice”, the bank said. It said it booked an impairment (in line with other banks) of SFr72.5 million, relating to Greek sovereign exposure and based on the year-end valuation.

Senior management changes

The bank said it is changing its senior management team for Continental Europe and Switzerland. Ludovic Chéchin-Laurans, who set up the Luxembourg business seven years ago and is presently overseeing EFG International’s operation in the Caribbean on a temporary basis, will move to Switzerland and become deputy CEO, Continental Europe, supporting Alain Diriberry. As previously reported, Gary Müller, formerly CEO of RBS Coutts Bank and of RBS Wealth International, was appointed in July 2011 as head of strategy for the European business.

Kong Eng Huat was appointed to the position of CEO of Singapore and South East Asia, effective February 2012. He was formerly head of wealth management, South and South East Asia at Merrill Lynch International Bank.

Offloading

In a business review last year, EFG announced it was shedding, or in the process of selling off, the following businesses:

- The asset management and non-banking business of EFG Bank in Sweden was transferred to Quesada, EFG International’s Stockholm-based wealth management boutique, effective 1 January 2012, and EFG Bank is in the process of being wound down.

- EFG Bank AB’s operation in Helsinki is in the process of being closed.

- A number of offices in Canada were closed during 2011.

- The office in Abu Dhabi was closed on 31 January 2012, and the office in Dubai is set to close on 30 June. EFG International will continue to target international business in the wider region, particularly the Non-Resident Indian market, with successful CROs formerly in Dubai relocating to Singapore.

In addition, EFG International has exited (or is in the process of exiting) a number of other loss-making private banking businesses / locations:

- In Switzerland, the decision to exit Lugano was announced in January 2012, and the office will close at the end of the first quarter. EFG International is also exiting its business in Valais, which will close formally at end-April, and has agreed to refer certain clients to Banque Cantonale du Valais.

- EFG International reached agreement to transfer the private banking activities of EFG Bank Denmark to SEB Wealth Management, effective from 1 January 2012.

- EFG International is in talks with prospective buyers for all or part of its business in France.

- Options relating to the Gibraltar business are being considered.

- EFG Capital’s office in New York was closed at end-January 2012.

- EFG International is in the process of liquidating its consulting subsidiary in Buenos Aires.

- EFG International’s business in India is in the process of being wound down.

- The Manila office has been closed.

“EFG International’s underlying performance during 2011 was disappointing, highlighting the importance of our detailed business review,” John Williamson, chief executive, said in a statement.