The Swiss private bank said first-half profit edged higher from pandemic-fueled trading. It stepped up measures to protect itself from the economic fallout further out.
Zurich-based EFG's first-half net profit rose 3.3 percent to 34.8 million Swiss francs ($37 million), it said in a statement on Wednesday. A 46 percent spike in commissions and fees during March and April more than made up for a 9.9 million franc charge with Italian tax authorities.
Controlled by Greece's wealthy Latsis shipping family, EFG is the latest wealth manager to display a short-term fillip from the coronavirus. The trading-fueled boom masks darker clouds looming in the form of margins eroding due to traditionally bulky banking structures, as finews.com reported on Monday following rival Julius Baer's report.
Shutting Up Shop
EFG lifted revenue by nearly eight percent in the first six months to 563.7 million francs, and also cut its spending by more than six percent. It also benefited from 13.6 million francs in gains from its seat on Switzerland's SIX stock exchange, released 9.9 million francs in provisions for expected credit losses, and received a 5.3 million franc life insurance-related boost.
Led by Giorgio Pradelli, the wealth manager is slimming down: it will sell a Chile business and its French onshore subsidiary, Oudart, as well as leave Guernsey. The measures, expected to finalize later this year as well as next year, are part of a bid to slash spending by five percent.
EFG said it is also expanding in other markets, like Australia, where it lifted its stake in Shaw and Partners to 61 percent in recent months, and expects to cement three-quarters of the boutique next year.
