The Swiss-based private bank managed to surpass last year's net profit in the first ten months of 2023 even though assets under management only rose slightly.
EFG International reported a net profit of 240 million francs for the first ten months of the year. This is significantly more than the net profit of 202.4 million Swiss francs ($227.71 million) achieved in full-year 2022. It also surpassed the 147.6 million francs in profit recorded in the first half of this year by a wide margin.
In an ad hoc announcement released publicly on Wednesday, the institution indicated that it experienced both growth and operational strength in the first ten months of the year.
Dynamik beschleunigen
«We continued to deliver a strong operational performance in July through October, resulting in record profitability for the first ten months of the year, and we saw solid growth in terms of asset inflows», EFG International CEO Giorgio Pradelli indicated in the announcement. He also said he expects the trend to continue and that the bank will be in a position to significantly accelerate momentum in 2024 and beyond given its strong pipeline in net new money.
It reported a cost-income ratio of 74 percent in the ten-month period, down from 76 percent in full-year 2022. The revenue margin fell to 99 basis points in the ten-month period from 100 basis points in the first half. When compared with a year earlier, expenses rose at a slower pace than income for the first ten months of 2023.
Net New Assets Rose 4.3 Percent
Net new assets totaled 5.2 billion francs, corresponding to an annualized growth rate of 4.2 percent, according to the announcement. Assets under management rose to 144.1 billion at the end of October from 143.1 billion at end-2022. Growth in net new assets was mostly outweighed by the Swiss franc's appreciation against other currencies.
Its effort to attract new client relationship officers (CRO) paid dividends in the Continental Europe, Middle East and Asia Pacific regions as the new hires began to make significant contributions to the business. Switzerland and Italy, however, recorded net outflows as a result of deleveraging.
In the first ten months of the year, the bank hired 130 new relationship officers, up from 75 hired in the first half. CEO Pradelli told finews.asia in that roughly a third of the officers came from Credit Suisse following its government-prompted rescue by UBS in March.
Share Buybacks
EFG indicated that given its strong capital position it would buy back up to 3 million of its shares by the end of April 2024 to fund its variable deferred share-based employee compensation program. This will complement its existing buyback program that foresees repurchasing up to 6 million shares by September 2024.
