Swiss bank EFG’s H1 profits hit by strong franc

Private bank EFG International reported an 18% fall in its first-half core net profit on Wednesday as the strong Swiss franc hit euro and dollar revenues and client inflows fell short of targets.
The bank reaffirmed the core net profit target for the year of 140 mln to 160 mln Swiss francs which it cut in June from a 200 mln franc target set earlier in the year.
EFG also said it had initiated a business review focused on repositioning it for growth and increasing shareholder value.
EFG's share price has fallen by almost 32% this year after dropping by 10.5% in 2010.
Core profit in the first half fell to 72.6 mln Swiss francs ($90.4 mln). Its net profit according to international financial reporting standards (IFRS), which includes amortisation of intangibles and employee incentive plans, was 55.9 mln francs.
The bank's 2011 profit target under IFRS is 110-130 mln francs. The bank is due to begin reporting under IFRS in 2012.
EFG attracted 2.7 bln francs in new client money in the first half of the year at an annualised growth rate of 6.4%, missing targets for double-digit growth. Total assets fell to 80 billion francs from 84.8 bln at the end of 2010 as the strong franc weighed on local currency valuations.
Last month the bank slashed its 2011 profit forecast as the strong Swiss franc hit revenues and said Chief Executive Lonnie Howell was stepping down. Howell has since been replaced by John Williamson.
EFG is 49% owned by the Latsis family of Greece, which made its fortune in shipping.
The bank is part of the EFG Group, which also controls Greek listed lender Eurobank EFG that also has bank operations in Cyprus.
The specialised mid-sized wealth manager EFG faces competition at home from rivals Vontobel and Sarasin .