Swiss Bank EFG International's Profit Rises on Higher Client Assets

By Elena Vardon

EFG International said strong levels of client activity and a rise in assets under management that was driven by record hiring last year boosted its profit in the first 10 months of 2024.

The Swiss private bank on Wednesday said its net profit for the period ended Oct. 31 rose to more than 260 million Swiss francs ($294.4 million), from more than 240 million francs for the same period the previous year.

Net new assets were 7.4 billion francs, representing an annualized growth rate of 6.3%, above the top end of the bank's 4% to 6% target range. It said the result was mainly driven by the record number of client relationship officers, or CROs, hired in 2023 in the aftermath of Credit Suisse's downfall and the post-pandemic market reopening.

Since the end of June, the group has brought in 18 new CROs, bringing the total for the 10-month period to 60 and putting it on track to beat its guidance of the upper end of 50 to 70 CRO gross hires per year. "We expect this to continue in the future years," Chief Executive Giorgio Pradelli said in a call with journalists.

Last year's spending on new hires are reflected in its cost base and increased revenue and profitability, he said. A full return on the investment is expected to be realized in the next 12 to 24 months, Pradelli said.

The Zurich-based lender said its assets under management stood at around 159 billion francs at the end of October, stable compared with the end of June and up from the 142.2 billion francs it managed at the end of 2023 due to strong net new assets, positive foreign-exchange movements and favorable market performance.

Revenue in the first 10 months rose 4% on year as double-digit growth in net banking and commission income and higher other income offset the expected decrease in net interest income--the difference between what banks earn on loans and pay clients for deposits--as central banks started cutting rates, it said.

At the end of the period, its common equity Tier 1 ratio--a key measure of capital strength--was 17.5%, the same as at the end of June.

EFG is on track to beat last year's record result and the group is well ahead of schedule on the execution of its midterm plan to 2025, Pradelli said.

Shares opened around 3% higher at 12.3 francs, bringing their year-to-date gains to 14%.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

November 20, 2024 03:26 ET (08:26 GMT)

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