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Research Tree provides access to ongoing research coverage, media content and regulatory news on EFG INTERNATIONAL AG. We currently have 6 research reports from 1 professional analysts.
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EFG INTERNATIONAL AG
EFG INTERNATIONAL AG
Weak H1 16 figures
27 Jul 16
Pre-tax profit decreased by 42% to CHF34m for H1 16 compared to H1 15. Operating income was down by 3% to CHF342m for H1 16. Operating expenses rose by 1% to CHF299m in H1 16. The tax ratio was 23% in H1 16 compared to 13% for H1 15. The net result attributable to ordinary shareholders declined by 54% to CHF22.3m for H1 16 compared to H1 15. Assets under Management were down by 3% to CHF80.6bn at the end of H1 16 compared to the end of 2015. Net new money was an outflow of CHF0.1bn for H1 16 compared to an outflow of CHF0.3bn in H1 15. The BIS capital ratio was 22.8% at the end of June 2016 and the CET 1 was 18.5% on a Basel 3 basis.
Scandal around BSI
24 May 16
EFG announced this morning that Swiss banking regulator FINMA has approved the acquisition of BSI and is supporting the acquisition. However, EFG additional said “EFG International has further taken note of FINMA’s and MAS’ press releases in connection with the BSI-related 1MDB matter. The share purchase agreement with BTG Pactual has an indemnity in relation to these and certain other matters up to the overall purchase price. It was agreed in the share purchase agreement that the indemnity will be backed by a material Swiss escrow account which, at closing, will contain 51.0m EFG shares issued to BTG as consideration, with shares locked up for two years. The fine and the penalty will result in a reduction in the purchase price. The indemnities and escrow account remain unchanged.” FINMA announced this morning that BSI is in serious breach of money laundering regulations: “Through business relationships and transactions linked to the corruption scandals surrounding the Malaysian sovereign wealth fund 1MDB, BSI AG committed serious breaches of money laundering regulations and “fit and proper” requirements. This is the outcome of enforcement proceedings launched by the Swiss Financial Market Supervisory Authority, FINMA. In the case of 1MDB, the bank has executed numerous large transactions with an unclear purpose over a period of several years and, despite clearly suspicious indications, did not clarify the background to these transactions. Among other measures, FINMA has ordered the disgorgement of profits amounting to CHF95m. FINMA has also launched enforcement proceedings against two of the bank’s former top managers. At the same time, FINMA announced its approval of the takeover of BSI by EFG International with the condition that BSI will be integrated and thereafter dissolved. This takeover is a positive development providing clients and employees with a perspective for the future.”
BSI acquisition catapults EFG on a new level but poor execution track-record
22 Feb 16
EFG International (EFG) and BSI announced today that they will join forces to form a leading Swiss private bank. EFG has agreed with the BSI owner BTG Pactual the purchase of BSI to be paid in cash for a total of CHF975m, and through the issuance of 52.6m EFG shares to BTG Pactual against a contribution in kind, subject to certain adjustments in case of dilution. As a result of the share issuance, BTG Pactual will have a stake of approx. 20% in EFG International and representation on its board of directors, subject to shareholder approval. Applying EFG’s closing price of CHF6.70 on 19 February 2016 to the 52.6 million shares, the total purchase price would amount to c.CHF1.33bn, including agreed adjustments currently estimated at CHF25m. Pending shareholder approval at EFG International’s Annual General Meeting scheduled for 29 April 2016, EFG intends to raise capital through a CHF500m rights offering, as well as in the form of CHF250m Additional Tier 1 instruments (CoCos). EFG's biggest shareholder, EFG Group, has committed to invest at least CHF125m in the intended rights offering. In addition, EFG has obtained commitments for a volume underwriting of CHF375m from international investment banks. If the intended rights offering is not fully subscribed, BTG Pactual and EFG Group have committed to subscribe additional shares or Additional Tier 1 instruments for the purpose of providing deal-financing certainty. On a combined basis as of 31 December 2015, BSI (unaudited results) and EFG had assets under management of c.CHF170bn, which would imply the position of the fifth largest private bank in Switzerland regarding EFG. Based on optimised infrastructure costs and efficiency gains, the EFG and BSI target pre-tax cost synergies of approx. CHF185m p.a., or around 15% of the current combined cost base, should come into full effect in 2019. More than half of the targeted cost synergies are intended to result from the migration to one common IT platform. Total one-off estimated implementation costs of c.CHF200m are expected to be recognised until year-end 2018. Even assuming a potential attrition rate of around 5-10% of combined assets under management (with an estimated impact on profit before tax of c.CHF60-105m), the transaction is expected to be accretive to earnings per share from 2018 onwards. Subject to shareholder and regulatory approvals, completion of transaction is expected in Q4 16.
Disappointing H2 15 earnings despite profit warning
22 Feb 16
Net result attributable to ordinary shareholders decreased by 7% to CHF57m for FY2015. Operating income was down by 3% to CHF697m for 2015 compared to 2014. Operating expenses rose by 5% to CHF604m in the same period. EFG said that reported profit was impacted by exceptional legal and professional charges and provisions, including a payment of $29.9m for the formal resolution of the US Tax Programme. Pre-tax profit decreased by 10% to CHF72.5m for 2015. Assets under management declined by 1% to CHF83.3bn at end 2015 compared to a year earlier. Net new money inflow was CHF2.4bn in 2015 compared to CHF4.4bn for 2014. On a Basel III (fully applied) basis, EFG International’s BIS Capital Ratio stood at 16.8%, compared with 18.7% at end 2014. The Common Equity Ratio (CET 1) was 12.8% at the end of December 2015, down from 14.2%. The dividend per share proposal is unchanged at CHF0.25 for FY2015. We refer to the BSI acquisition in a special update.
Profit warning for H2 15
23 Nov 15
EFG released a statement in which it comments on business performance. Net new asset growth was 8% on an annualised basis during the period July to October 2015. Revenue-generating Assets under Management were CHF83.4bn at end-October, up from CHF80.2bn at end-June 2015. EFG said that operating income and the revenue margin remain below expectations, as in the first half of 2015. As a result, underlying net profit will be lower than the level attained in the first half. EFG International recognises the need to improve profitability fundamentally. The cost review has identified measures including efficiency improvements, a reduction in the number of marginal offices, and a reduction in headcount of 200 employees. These measures represent a reduction of c.5% or CHF30m, with associated one-off restructuring charges of up to 50% of this amount. These savings, to be realised in full by the end of 2016, will reset the cost base and finance growth initiatives. EFG International is due to report its annual results on 24 February 2016 when it will provide more details on both cost savings and growth initiatives.
Disappointing H1 15 figures
29 Jul 15
Pre-tax profit was CHF59m for H1 15 compared to CHF2m for H1 14 and dropped by 25% compared to H2 14. Operating income was up by 3% to CHF353m for H1 15. Operating expenses rose by 7% to CHF296m in H1 15. EFG was impacted by litigation provisions of CHF64m for H1 14, of which CHF33.7m in litigation-related charges and provisions, including CHF26.3m related to the outcome of a long-standing legal action in Switzerland and CHF30m in relation to the US Tax Programme. The net result attributable to ordinary shareholders was a profit of CHF48m for H1 15 compared to a loss of CHF6m for H1 14 and a profit of CHF67m for H2 14. Assets under Management were down by 5% to CHF80bn at end H1 15 compared to end 2014. Net new money was an outflow of CHF0.3bn for H1 15 compared to an inflow of CHF2.7bn in H1 14. The BIS capital ratio was 17.8% at the end of June 2015 and CET 1 was 13.9% on a Basel 3 basis.
Making Mobiles Better
17 Jan 17
Mobile phones are increasingly the key connection for the modern world. This means that the performance of mobile phones, and their networks, is going to become more critical for all the apps and businesses that rely on them. New technologies such as VR, AR, and AV will need better, more reliable connections to really move into the mainstream. In this thematic piece we attempt to identify some of the most important issues facing mobile phone networks and their users, and start to identify solutions and enablers that will solve these problems and create value by doing so.
The Monthly January 2017
09 Jan 17
Despite all the hullaballoo of the Brexit vote and the subsequent election of Donald Trump as the next US President, the UK stock market prospered last year, especially in the latter few months of 2016. The combination of a depreciating currency – making $ earnings more valuable in relative terms - and the Trump emphasis on infrastructure expenditure drove the stock market higher
N+1 Singer - Best Ideas 2017 - Top picks
04 Jan 17
Today we publish our Best Ideas for 2017 - 12 stocks that we believe have excellent prospects in the current year together with a detailed discussion of what we see as the key sector and market themes for 2017. Our top picks are Cineworld, Elementis, Herald Investment Trust, Hill & Smith, IQE, MySale, Redde, ReNeuron, RhythmOne, SDL, Servelec and Severfield.
Small Cap Breakfast
17 Jan 17
Global Energy Development (GED.L) — To be renamed Nautilus Marine Services. Schedule 1 from developer and seller of hydrocarbons and related products. Reverse takeover. Raising $10.5m via a convertible. Expected 9 Feb. Eco (Atlantic) Oil & Gas—TSX-V listed oil and gas exploration has announced its intention to float on AIM. Assets in Guyana and Namibia. Proposed £2m-£3m fundraise. Diversified Gas & Oil—According to LSE website first day of trading on AIM now expected for 30 January.
N+1 Singer - Morning Song 16-01-2017
16 Jan 17
As the birthplace of Stephenson, Armstrong and Swan, the North East of England has a proud history of industrial and technological innovation. Despite local economic challenges, the region’s industrial heritage lives on through continuing success in high end engineering and technology. The recent takeovers of private equity backed SMD (subsea robotics) and Nomad Digital (wi-fi on the railways) are testament to this. The North East has also emerged as a leader in genetics and genomics with an enviable life sciences and healthcare infrastructure. Against this backdrop, we expect the region to continue to throw up attractive IPO candidates to build on the six new listings in the past three years. We expect 2017 to be far kinder to the existing portfolio of North East plcs than 2016 (a year to forget) with recent management changes one important theme for the new year. Our top picks are Hargreaves Services, Quantum Pharma and Zytronic (all N+1 Singer Corporate clients) and we are Buyers of Northgate and Grainger.
N+1 Singer - Morning Song 19-01-2017
19 Jan 17
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