EFG International AG (EFGN), the Swiss bank controlled by billionaire Spiro Latsis and his family, said it’s “behind where it needs to be” in meeting a profit target for next year after earnings grew 0.5 percent in 2013.
Net income increased to 111.8 million Swiss francs ($126 million) from 111.2 million francs a year earlier, the Zurich-based bank said in an e-mailed statement today.
“Private banking is experiencing challenging times, and our results last year were impacted by fragile client sentiment, particularly in the third quarter, and exceptional legal and regulatory expenses,” Chief Executive Officer John Williamson said in the statement. “We are absolutely committed to delivering a step change in growth and profits.”
EFG is targeting annual profit of 200 million francs by 2015. The bank withdrew from about 20 locations since mid-2011 to bolster earnings and sold the remainder of its stake in EFG Financial Products, now known as Leonteq AG (LEON), for about 34 million francs to Notenstein Private Bank last April.
A 15.4 million-franc charge for “a long-standing legal action in the U.K.” hurt full-year profit, the company said. EFG also made a provision of 8 million francs in the first half for its share of an advance payment made by Swiss banks as part of a tax agreement between Switzerland and the U.K.
Revenue-generating assets under management were little changed at 75.9 billion francs, compared with 76 billion francs at the end of June. New inflows were 2.5 billion francs.
EFG is one of 106 firms that entered a U.S. Department of Justice voluntary disclosure program for Swiss wealth managers seeking to resolve a dispute between the two countries over untaxed American funds in offshore accounts. The company reported a provision of 6.5 million francs to cover future legal expenses related to the program.
EFG said it wasn’t possible to make a reliable estimate of the final penalty that may be payable as a result of the program.
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