Reports

Net Profit Rises At EFG International

Tom Burroughes, Group Editor, 25 February 2021

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Revenue-generating assets under management reached SFr158.8 billion at the end of 2020, against SFr153.8 billion at the end of 2019; net new assets reached SFr8.4 billion. Net new assets growth stood at an annualised rate of 5.5 per cent. 

EFG International, the Zurich-listed private banking group operating in a number of regions, yesterday said that its underlying net profit rose in 2020 to SFr114 million ($125.4 million) from SFr108.7 million a year earlier, assisted by a cut to costs.

Operating costs, on an underlying basis, fell to SFr942.7 million in 2020 from sFr975.9 million a year before. 

Revenue-generating assets under management reached SFr158.8 billion at the end of 2020, against SFr153.8 billion at the end of 2019; net new assets reached SFr8.4 billion. Net new assets growth stood at an annualised rate of 5.5 per cent. 

All regions recorded positive net inflows and especially Continental Europe, the Middle East and UK regions  achieved “strong results”, with growth rates exceeding the 4 to 6 per cent target range, the firm said. The Switzerland and Italy region continued to record “consistently positive net asset inflows” and the Latin America region returned to growth, it said. After outflows because of deleveraging in the first quarter of 2020, the Asia-Pacific region logged positive inflows during the remainder of the year, it said. 

EFG said it hired, signed or approved 76 new client relationship officers in 2020, in line with its guidance of 70 to 100 CROs. At the same time, EFG raised the productivity of its CROs, reducing the overall number of CROs from 815 at end-2019 to 772 at end-2020 and increased the average portfolio size per CRO to SFr254 million (excluding Shaw and Partners, the Australian wealth management house that it bought in 2019).  

The firm said that it had a Swiss Common Tier 1 capital ratio – a standard way for measuring capital buffers – of 16.2 per cent. EFG said it placed $400 million of Tier 1 notes and repurchased about half of outstanding Tier 2 notes in a bid to bolster its capital. 

It proposed to issue a dividend of SFr0.30 per share, unchanged from last year.

"Despite continued pressures on net interest income, our core business performed well – especially in the second half of the year. We expect to see similar trends going forward, as we continue to invest in growth initiatives and enhance our operational efficiency,” Giorgio Pradelli, EFG International’s chief executive, said.

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