Swiss-listed EFG said its exposure to Greek assets was 0.5 per cent of all assets, commenting at a time of rising concern about European bank exposure to the country's markets.

EFG International, the Swiss private banking group, moved to reassure investors today over its exposure to assets from embattled Greece, stating that they comprised less than 1 per cent of its total asset base.

As investors mulled the significance of European “stress test” operations late last week that were designed to show how financial institutions would fare if markets crashed and economies sank, EFG said its exposure to Greece was just 0.5 per cent of EFG’s total assets.

Greece’s EFG Eurobank Ergasias - an entirely separate business from EFG International - was one of the eight European banks which failed last Friday's stress tests as set by the European Banking Authority, with a combined shortfall of €2.5 billion. The tests are designed to show whether banks need additional buffer capital to shield against a sharp and adverse market move, such as a sovereign debt default. 

Other banks which failed the tests were Agricultural Bank of Greece, Oesterreichische Volksbanken; Banco Pastor, Caja de Ahorros del Mediterraneo, Banco Grupo Caja3, CatalunyaCaixa and Unnim. These banks were found to have insufficient reserves to maintain a core Tier 1 capital ratio of 5 per cent in the event of an economic slowdown. Banks tested in Italy, Germany, France, the U.K. and Ireland were given a clean bill of health by the EBA.

EFG was at pains to point out that EFG Eurobank Ergasias is a completely separate entity from EFG International, a fact which may have been overlooked in some investment commentary about the tests, EFG said in a statement.

The 0.5 per cent figure comprises exposure to Greek government bonds (0.2 per cent, held in EFG International’s books at an average discount of circa 50 per cent of the nominal value) and exposure to Greek banks and their foreign subsidiaries (0.3 per cent), the bank said in a statement today.

“There have been some instances recently of “EFG” being used in reports as shorthand for the Greek commercial bank, Eurobank EFG, which is an entirely separate business from EFG International (although it has a common major shareholder). The salient facts in relation to EFG International and Greece are clear,” the statement said.

EFG, which is listed and headquartered in Zurich, operates in 30 countries but is not present in Greece.

The stress test issue is significant for wealth management because the financial strength of a bank has become an important selling point for private banks mindful that clients have been worried about the weaknesses of some banks. 

As reported by this publication late in June, John Williamson, previously the chief executive of the firm’s UK and Channel Islands subsidiary, is now CEO of EFG International. Lonnie Howell, the co-founder of the firm in 1995 along with Jean Pierre Cuoni, has decided to step down although he is to keep his substantial share stake.