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EFG sees net profit triple in first half of 2021

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EFG headquarters in Zurich.

Zurich-based EFG Bank, present in Limassol and Nicosia, saw IFRS net profit triple to CHF 106.5 million (€98.4 million) on CHF 629.3 million (€581.2 million) in revenue for the first half of 2021, according to a statement released on Thursday.

Assets under Management reached an all-time high of CHF 172.0 billion (€158 billion) at the end of June 2021, compared with CHF 158.8 billion at the end of 2020. This was driven by continued strong net new asset inflows of CHF 4.2 billion (€3.9 billion) in the first half of 2021, corresponding to an annualised growth rate of 5.3 per cent, as well as by positive foreign exchange effects and favourable markets.

The Switzerland and Italy, UK and Continental Europe and Middle East regions all generated over CHF 1 billion (€923.6 billion) of net new asset inflows. The Latin America region also made a positive contribution, albeit with a lower growth rate. In the Asia Pacific Region,deleveraging in lower-margin currency-linked products led to outflows. Excluding this deleveraging effect, the Asia Pacific Region recorded positive net new asset inflows. In addition, EFG’s Asset Management business continued to attract strong inflows from both private and institutional clients.

IFRS operating profit more than doubled to CHF 153.4 million in the first half of 2021.

“We delivered a strong operational performance in the fi rs t half of 2021 and maintained our growth momentum. We have now recorded net new asset inflows for nine consecutive quarters and Assets under Management have reached an all-time high of CHF 172 billion. With the doubling of our underlying net profit for the period, we have taken our profitability t o a new level, commented Giorgio Pradelli, CEO of EFG International.

Operating expenses were down by 4.0 per cent and underlying revenue up by 5.3 per cent. Underlying cost/income ratio improved to 79.6 per cent in the first half of 2021 compared with 87.3 per cent in the first half of 2020 as a result of continuous and disciplined cost management, the statement said.

Top-line growth continued, with strong capital and liquidity positions, and with a Swiss GAAP (Swiss accounting standards) Common Equity Tier 1 ratio of 16.5 per cent, a Total Capital Ratio of 22.2 per cent and a Liquidity Coverage Ratio of 202 per cent.

EFG’s IFRS net profit for the first half of 2021 includes a positive net contribution of CHF 33.2 million (€30.6 million) relating to the life insurance portfolio. This incorporates the positive outcome of the settlement in principle (subject to execution of a final settlement agreement) reached with Transamerica on disputed premium increases for life insurance policies.

“Our efforts to deliver our entire investment expertise and full range of products and services to our clients are proving increasingly successful and we are seeing the positive impact of our growth initiatives. In the second half of the year, we will continue to generate operating leverage and execute on our 2022 strategic plan,” Pradelli concluded.


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