EFG expects damages from the global pandemic and disclosed measures it is taking in response. The Swiss private bank is also replacing its operating chief.
The Zurich-based wealth manager's assets crumbled to 139.7 billion Swiss francs ($143 billion), from 153.8 billion francs at year-end, it said in a statement on Wednesday. The drop follows slides in markets as well as foreign exchange swings amid the coronavirus crisis, as well as a mild April rebound.
EFG, controlled by the wealthy Greek shipping family Latsis, said client activity picked up in the first quarter and spiked commission income. The virus caused «limited» valuation losses on its fixed income portfolio, and negligible losses of loans to wealthy clients.
Whittling Booking Centers
Further out, the outlook is less robust: EFG said it expects to operating income to suffer from low interest rates, while clients will keep unwinding their leverage, which is set to hit net new assets as well as funds under management. In response, EFG said it will measures to safeguard revenue and to quicken cost cuts.
«We are facing unprecedented times,» EFG CEO Giorgio Pradelli said. The bank will speed up a previously-planned slimming of its booking centers, and will otherwise seek to centralize its offshore centers through automation as well as new digital solutions for clients.
New Chairman Enters
The bank also said it will replace its operating chief, Christian Flemming, who is stepping down for the same job at BTG Pactual from mid-September. EFG is poaching Martin Freiermuth (pictured below) from Banque Internationale à Luxembourg to succeed him.
Freiermuth spent the last six years at BIL, most recently as head of products and markets. Previously, he worked for Vontobel including in private banking for 12 years.
The statement comes ahead of EFG's annual meeting later on Wednesday, where shareholders will elect Peter Fanconi as the bank's new chairman. The Latsis family owns 44 percent of EFG, while BTG Pactual holds 29 percent following a 2016 deal over Banca della Svizzera Italiana, or BSI.
