EFG International AG, the Swiss private bank controlled by Greek billionaire Spiro Latsis and his family, climbed the most in five months in Zurich trading after offering investors an option to exchange capital instruments as it seeks to meet new regulatory requirements.
EFG surged as much as 11 percent, the most since June 28, and was up 8.1 percent to 6.55 Swiss francs as at 4:20 p.m. local time. That values the company at 960.69 million francs ($1.06 billion).
The bank will offer the holders of 400 million euros ($537.8 million) of fiduciary certificates an option to exchange them for bonds, the firm said in a statement today. EFG also plans to cancel the bons de participation -- notes that do not carry voting rights -- underlying the certificates.
“The rationale is to proactively manage our regulatory capital and its composition in light of the transition to the Basel III framework,” Deputy Chief Executive Officer Lukas Ruflin said in a telephone interview.
Banks are switching between different types of equity, debt and hybrid capital in order to comply with tougher crisis-prevention rules designed to help financial firms absorb losses.
“We believe the exchange and cancellation announcement today is positive for EFG,” Teresa Nielsen, an analyst at Vontobel Holding AG in Zurich, wrote in an e-mailed note to clients today.
EFG will manage to comply in the future with minimum regulatory capital requirements issued by Finma, the Swiss financial markets regulator, and may record an accounting gain of 200 million euros as a result of the measures, according to Nielsen. That gain may be offset in the capital exchange process, leaving a neutral impact on the company’s profit-and-loss account, she said.