By Elena Vardon

EFG International posted a rise in profit and net new assets for 2024, and said it is buying smaller peer Cite Gestion.

The Swiss private bank said that net profit for the year rose to 321.6 million Swiss francs ($356 million)--a record high excluding the non-operating effects of its acquisition of BSI in 2016--from 303.2 million francs the previous year.

The Zurich-based lender said its revenue-generating assets under management stood at 165.5 billion francs at the end of the year, up from 142.2 billion francs a year prior. The company said the result was boosted by higher net new assets, positive foreign-exchange impacts, and a favorable market performance.

EFG's net new assets increased to 10.1 billion francs for the year due to the contribution from client-relationship officers hired after the wake of Credit Suisse's downfall and the postpandemic market reopening, as well as its performance in the Asia-Pacific region. This represents an annualized growth rate of 7.1%, which was above the top end of the bank's 4% to 6% target range.

The rise in assets translated into higher banking fee and commission income, which led revenue to rise around 5% to 1.50 billion francs, it said.

At the end of the period, EFG's common equity Tier 1 ratio--a key measure of capital strength--stood at 17.7%, up from 17.0% a year prior.

The acquisition of Geneva-headquartered Cite Gestion for an undisclosed price will have a one percentage point impact on its CET1 ratio, and should be earnings-per-share accretive by 2026, EFG said. Subject to regulatory approval, the deal is set to close in the second half of the year.

The bank is seeking acquisitions in a bid to capture a bigger share of the market managing money for the world's wealthy and to complement organic with inorganic growth, Chief Executive Giorgio Pradelli told The Wall Street Journal late last year.

"For us, [Cite Gestion] is a growth play. There will be probably some synergies, but [they] will be mainly on the infrastructure, on the system," Pradelli said in a call with reporters on Wednesday. "It is more a focus on business development further to strengthen Switzerland."

The bank will continue to try to identify further opportunities for deals which will generate an at least 10% return on investment over three years, he added.

Cite Gestion has around 135 employees, made 6 million francs in net profit in 2024, and had 7.5 billion francs in assets under management at the end of the year.

EFG--whose largest shareholder is the Greek shipping billionaire family Latsis--proposed a dividend of 0.60 franc a share, and said it would outline a new midterm strategy and financial targets in the fourth quarter.

The stock rose as high as around 4% in early European trading, hitting 14.90 francs--its highest level in more than 14 years.

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

(END) Dow Jones Newswires

February 19, 2025 04:47 ET (09:47 GMT)

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