EFG International (EFGN) H2 2023 earnings summary

Executive summary

• FY 2023 net profit reached a record CHF 303.2 mn, up 49.8% YoY; ROTE was 18.2%, above the 15–18% 2025 target range.

• NNA was CHF 6.2 bn, a 4.4% growth rate; year-end revenue-generating AuM was CHF 142.2 bn.

• Operating income rose to CHF 1,430.7 mn and operating profit to CHF 372.8 mn; 2025 profitability targets were achieved ahead of schedule.

Financial highlights

• Net interest income increased 29% to CHF 512.0 mn; net commission income fell 7% to CHF 587.2 mn, or 3% excluding the A&G stake sale impact.

• Net other income rose 35% to CHF 331.5 mn, supported by FX transactions, swap income and the life insurance portfolio.

• Operating expenses increased 8.5% to CHF 1,057.9 mn, reflecting hiring, variable compensation and technology investment; personnel expenses rose 11% to CHF 764.8 mn.

• Basic EPS rose to CHF 0.94 from CHF 0.60; net profit was CHF 303.2 mn versus CHF 202.4 mn.

• A CHF 23.6 mn impairment charge covered redundant legacy IT assets; it was included in 2023 net profit.

Outlook and guidance

• 2025 targets are 4–6% annual NNA growth, an 85 bps revenue margin, a 69% cost/income ratio and 15–18% ROTE; profitability increased confidence in exceeding the ambition.

• 2024 priorities include managing declining net interest margins, accelerating NNA growth, lifting commission income through higher-value offerings and improving efficiency.

• New CROs are expected to support NNA growth and gradually lift revenue and profitability, with full benefits expected in 2025 and beyond.

• Annual cost savings of CHF 60 mn by 2025 versus the 2021 cost base remain on track; process optimisation, automation and digitalisation support efficiency.