Swiss private bank EFG International has reported an AuM decline and warned of difficulties in the near future due to adverse market conditions triggered by the Covid-19 crisis.
Negative market conditions amid the pandemic and foreign exchange movements have resulted in a decrease in the bank’s AuM to CHF139.7bn, with a mild April rebound.
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However, EFG said that client activity increased and it recorded the highest net commission income in its recent history.
The bank reported positive inflows, with an annualised net new asset growth rate of 2.5%. The bank attributed the performance to strong contribution from the UK, Continental Europe & Middle East as well as Latin America markets.
The pandemic had limited impact on its Q1 performance, EFG said, with limited valuation losses in its fixed income trading portfolio.
In the coming days, the bank forecasts that operating income will be bogged down by low interest rates while further deleveraging will affect inflows and AuM.
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By GlobalDataTo address these issues, EFG remains committed to cost reduction measures.
EFG CEO Giorgio Pradelli said: “Despite the recent market turmoil, we had a solid business performance in the first quarter. We achieved record net commission levels and solid net new assets, albeit short of our target range.
“However, our Assets under Management have been adversely impacted by market movements. Going forward, as we expect to see further pressure on our revenues, we will accelerate our planned cost reduction measures, including our footprint rationalisation and optimisation of our operational setup, in order to realise the efficiency gains sooner than originally planned.”
Appointment of COO
Moreover, EFG named Martin Freiermuth as its new COO, replacing Christian Flemming.
Freiermuth, who will also sit on EFG’s executive committee, will assume the new role in the middle of August this year.
He most recently worked as the group head of Products & Markets at Banque Internationale à Luxembourg.
He also had a stint as the head of Private Banking Services at Bank Vontobel in Zurich.
He will report to Pradelli in the new role and will be tasked with driving the digitalisation initiatives of the bank.
Meanwhile, Flemming will join BTG Pactual as the COO in mid-September 2020.
