In addition to the AuM figures, the bank announced two boardroom changes, including the decision of EFG Group founder Dr Spiro J Latsis not to stand for re-election to its board of directors.
EFG International yesterday reported that its assets under management in the first quarter of 2021 rose by SFr11.2 billion ($12.32 billion), reaching a record of SFr170 billion, up from SFr158.8 billion at the end of 2020. Separately, it announced a number of boardroom changes, including those affecting the Latsis dynasty - a major shareholder.
The Zurich-listed firm said that the AuM rise was a result of net new asset inflows, positive foreign exchange effects and favourable markets.
The group recorded net new asset inflows of SFr1.6 billion in the first quarter of 2021, corresponding to an annualised net new asset growth rate of 4 per cent, at the lower end of its 4 to 6 per cent target range. Switzerland and Italy were the main sources of growth, with the UK, Continental Europe and the Middle East also generating “solid inflows”, it said.
Underlying operating income increased in the first quarter of 2021, compared with both the first and fourth quarters of 2020, the firm said, without providing hard numbers. Revenue margins rose slightly, it said.
“Overall, this solid performance resulted in continued strong profitability for the first quarter of 2021,” EFG International said in a statement.
As previously announced, EFG has agreed to sell its minority stake in the Spanish private bank Asesores y Gestores Financieros SA. This transaction, which is expected to close in the first quarter of 2022, will cut EFG’s assets under management by about SFr13 billion, but will have a slightly positive impact on the bank’s revenue and cost metrics, adding a further 90 basis points to EFG’s CET1 ratio.
“EFG’s good growth momentum and continued strong profitability in the first quarter are evidence that the revenue management and cost reduction measures we introduced are taking effect and creating operating leverage. As a result, we remain on track with the execution of our 2022 strategic plan,” Giorgio Pradelli, EFG International’s chief executive, said. “Given the acceleration of net new asset inflows in April and the sustained high levels of client activity that we have seen, I am confident that we can continue on this positive trajectory going forward.”
The firm added that Dr Spiro J Latsis, who founded EFG Group in the 1980s, had decided not to stand for re-election at yesterday’s annual meeting. Dr Niccolò H Burki, vice-chair of the board of directors, also did not stand for re-election. Dr John S Latsis, principal representative of the Latsis family, will remain on the board, having been a member since 2018 and a major shareholder.