The Swiss private bank weathered the pandemic storm surprisingly well. But growth didn't come cheap.
In the midst of the corona crash last March, EFG had issued a warning of a decline in performance. But the Zurich-based private bank set out to catch up, mainly in the second half of the year, and especially in terms of profitability, the company said in a statement on Wednesday.
Dividend Unchanged
Net profit rose to 115.3 million Swiss francs ($128 million), up 22.4 percent from a year earlier. On this basis, EFG intends to pay an unchanged dividend of 30 centimes per share.
A closer look reveals that profitability benefited from special effects as well as cost-cutting measures. The key cost-income ratio improved to 78.2 percent, while an insurance portfolio resulted in a profit of 14.9 million.
Fewer Client Advisers
By contrast, profitability overall declined, in particular due to falling interest income (minus ten percent). Against this background, operating income declined from 1.14 billion francs in the previous year to 1.11 billion francs. By contrast, commission income climbed by 10.6 percent and now accounts for 59 percent of the group's total income.
Growth proved to be moderate. Assets under management rose from 153.8 billion to 158.8 billion, despite net new money of 8.4 billion. EFG noted that all business regions contributed to growth. During the year, the bank hired 76 new client advisers – a key indicator in the bank's broker model. However, their total number fell from 815 to 772, and the average assets under management per banker increased to 254 million francs.
Strong Start
49 percent of assets are now managed in discretionary mandates, which is significantly more than at large Swiss competitors. The growth did not come free of charge, however, as the institute invested in new offices in Australia, Milan, Lisbon, Porto and Dubai, which have now already contributed to new money.
According to the statement, the year 2021 has started promisingly, the private bank hopes for some new money. The institute now wants to both maintain the pace of growth and further improve its profitability.
