Banking sector equity research

Explore the most viewed and latest equity research and media content for Banks. Stocks in this sector include banks that offer: retail services, investment banking, commercial services, online banking, and savings and loans.

Banking sector equity research

Explore the most viewed and latest equity research and media content for Banks. Stocks in this sector include banks that offer: retail services, investment banking, commercial services, online banking, and savings and loans.

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EFG International

Return to a profit, influenced by BSI integration and insurance portfolio loss

Some news was released this morning from EFG: 2018 figures, an acquisition in Australia and a new outlook and targets for 2022. The net result attributable to ordinary shareholders returned to a profit of CHF70m for 2018 compared to a loss CHF60m for 2017. EFG said that the underlying net profit was CHF192m in FY2018 compared to CHF165m in FY2017. Operating income was slightly up by 0.3% to CHF1.15bn for 2018 compared to 2017. Operating expenses declined by 11% to CHF1.06bn in the same period. Pre-tax profit switched from a loss of CHF71m for 2017 to a profit of CHF80m for 2018. The tax ratio was 9% for 2018 compared to a tax credit of CHF14m for 2017. Assets under Management declined, mainly in Q4 18, by 8% to CHF131.2bn at the end of 2018 compared to the end of 2017. Net new money outflow was CHF2.1bn in 2018 compared to CHF5.8bn in 2017. The Common Equity Ratio (CET 1) was 17.6% at the end of 2018 compared to 17.3% at the end of 2017. Dividend per share proposal increased from CHF0.25 for FY2017 to CHF0.30 for FY2018. EFG International announced today that it will acquire 51% of the Australian financial service provider Shaw and Partners for up to CHF44m via a combination of cash and shares in two tranches paid in 2020 and 2021. Shaw and Partners is an established domestic player with Assets under Management of AUD15.9bn (c. CHF11.4bn). The acquisition price seems reasonable at first view. The transaction is expected to be EPS accretive from the first year and to have a marginal impact on capital ratios regarding EFG. EFG updated as well its financial targets for 2019 to 2022 today: • Average net new asset growth of 4-6% over the period (previous target: 3-6% in 2019). • Achieve a revenue margin of at least 85bp (target unchanged). • Achieve a cost/income ratio of 72-75% (previous target: below 70%) by end-2022. • Achieve a return on tangible equity in excess of 15% (new target). EFG aims to return 50% of underlying profit to shareholders as dividend payments, while maintaining a minimum CET1 capital ratio of 14%.

  • 13 Mar 19
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