EFG International has ramped up its growth momentum in 2020 despite the challenging market, with a 22% surge in net profit and accelerated net new asset growth.
Strong net new asset inflows returned all its business regions to growth last year, the Swiss private bank noted.
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Highlights
The bank’s IFRS net profit in 2020 stood at CHF115.3m, versus CHF94.2m in 2019. The IFRS net profit for 2020 includes a CHF14.9m gain from its legacy life insurance portfolio, CHF6.2m of legal costs and provisions, as well as CHF7.8m intangible amortisation charge.
Operating income dropped from CHF1.17bn to CHF1.13bn.
However, operating expenses fell, decreasing to CHF951.5m in 2020 from CHF998.3m in the prior year.
Revenue-generating assets under management grew to CHF158.8bn in 2020 from CHF153.8bn a year ago.
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By GlobalDataThis was driven by inflows of CHF8.4bn, with inflows of CHF4.2bn in both the first and second halves of last year. All the regions, mainly the Continental Europe & Middle East and UK regions, registered positive net inflows with growth rate surpassing the 4-6% target range.
The Switzerland & Italy Region continued to see positive net asset inflows while the Latin America Region returned to growth. The Asia Pacific Region saw outflows as a result of deleveraging in Q1 2020 but returned to positive inflows during the remaining part of 2020.
The bank’s new operations in Australia, Milan, Lisbon, Porto and Dubai accounted for net new assets of CHF2.7bn last year.
The growth marks the second consecutive year of growth for the private bank and aligns with its 2022 strategic plan. Net new asset growth increased to 5.5% in 2020 from 4% a year earlier.
EFG’s total capital ratio was 19.9% in 2020, as against 20.1% in 2019. Its CET1 capital ratio remained unchanged at 16.2%.
EFG CEO Giorgio Pradelli: “We invested in enhancing our digital capabilities to ensure a high level of connectivity and supported our clients with our extensive expertise and tailor-made private banking services.
“This is also reflected in our results, as we accelerated our net new asset growth momentum and boosted profitability. 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.”
Outlook
EFG also revealed that client activity was strong in the first weeks of this year and net new assets were “promising”.
The bank wants to improve profitability through revenue management and cost control.
It also aims to rationalise its international booking centre footprint and optimise its operational set-up by centralising some corporate functions. Plans are also on to automate internal processes.
