EFG International crosses CHF 200bn AuM and delivers record H1 profit

The private bank's best-ever semester profit is ahead of its 2028 targets; management focuses on defending margin and integrating M&A.

EFGN.SW · Earnings Call · 2026-07-22

Record H1: Crossing CHF 200bn and Beating Targets

The first half of 2026 was a milestone quarter for EFG International. The private bank closed the acquisition of Quilvest on the eve of its results, pushing assets under management past the CHF 200 billion mark for the first time. Net new assets came in at CHF 5.7 billion, an annualized growth rate of 6.2%, above the 4-6% target range. The result: a record net profit of CHF 185 million, translating into a return on tangible equity of 22.4%, three percentage points higher than a year ago and already ahead of the 2028 target of 20%. The Assets under Management milestone was a central theme of the call. "For the first time ever, EFG was able to cross the CHF 200 billion mark in terms of Assets under Management," CEO Giorgio Pradelli said. He emphasized that scale matters in international private banking, and that the firm's growth has been organic and sustainable, marking the 15th consecutive semester of positive net new assets. But the spotlight also fell on margin resilience. The revenue margin declined to 91 basis points, down 6 basis points year-on-year, yet the bank managed to grow operating income by 7% and keep the cost-to-income ratio flat at 71.5%. CFO Dimitris Politis explained that the drop in margin was primarily driven by the continued wind-down of the life insurance portfolio, which contributed only 1 basis point in H1 versus 2 basis points a year ago. Excluding that, the underlying margin was close to 90 basis points. He argued that the company has done well to defend margin: “We've been good at defending, and we're keeping the revenue margin above the 90 basis point level.” — Dimitris Politis, CFO, Deputy CEO · 2026-07-22 The bank's commission margin improved to 46 basis points, helped by higher mandate penetration. Management reiterated its focus on increasing recurring fees through products like advisory mandates and a higher share of assets under management. The Cost to income ratio improved by 1.6 percentage points from the second half of 2025, despite absorbing acquisition-related restructuring costs. The CFO noted that cost discipline is a continuous effort, and the Simplicity 2.0 program is expected to generate CHF 70-80 million in efficiency gains by 2028, with about half already identified.

Margin Defense and the Life Insurance Wind-Down

One notable change is the explicit guidance on the margin outlook. The company sees limited headwinds from interest rates, and the life insurance drag is expected to fade to zero over the next couple of years. This suggests that the revenue margin could stabilize around 90 basis points, providing a solid base for the 2028 targets. The CFO stated:

We believe that for a first half performance... the 91 basis points, maybe 90 excluding life insurance, which is not going to be there for very long, should be the right level of margin for us in the medium term.
Dimitris Politis, CFO, Deputy CEO · 2026-07-22

The life insurance wind-down is a deliberate strategic shift. The portfolio is being run off, contributing just 1 basis point of revenue in H1 2026 versus 2 basis points a year earlier, and management expects it to decline to zero. This removes a source of volatility, allowing investors to focus on the core private banking franchise. Meanwhile, the bank's client activity remained strong, particularly in Asia-Pacific and Continental Europe & Middle East, both of which delivered double-digit net new asset growth. The CEO attributed this to strong demand for international private banking services, a theme he described as "wealth on the move," with cross-border flows growing faster than nominal GDP. He also noted that competition is intensifying across geographies, but EFG has been successful in attracting top talent.

M&A Integration and the Growth Outlook

M&A integration was a key topic. The acquisition of Quilvest closed just before the call, adding to prior deals (Cité Gestion and ISG). These acquisitions are currently dilutive to the cost-to-income ratio, but management expects them to become more profitable after technology migration in the first half of 2027. In the meantime, they contributed single-digit million Swiss francs to P&L in H1. CEO Pradelli also emphasized that the competitive environment for hiring has intensified, but EFG has been successful in attracting "A teams" and now has AuM per CRO at an all-time high of CHF 360 million. The bank's organic capital generation remained robust, adding 230 basis points to CET1 in the semester, bringing the core Tier 1 ratio to 15%. This supports the progressive dividend policy and provides ample room for further growth investments. The CEO closed the call with confidence: "We are set to deliver an increasing operating leverage and strong performance in the next quarters and semester." The broader macro backdrop appears supportive. The CEO mentioned resilient financial markets and a risk-on tone among clients, which drives client activity and trading revenues. He cited "wealth on the move" and cross-border flows growing faster than nominal GDP, an environment that favors international private banks. He also highlighted the firm's ability to navigate geopolitical volatility, a key selling point for its clientele. Overall, EFG has started its 2026-2028 strategic cycle with momentum. The record profit, strong capital generation, and successful M&A closure set a positive tone. The focus now shifts to integrating the new acquisitions and continuing to defend margin while growing the book. The company reaffirmed its 2028 targets, including a 15% CAGR in net profit and a return on tangible equity of 20% or higher. If the margin stabilizes as guided, the path to these targets looks credible.