EFG delivers solid operating results for the first three months and announces nomination for the Board of Directors
EFG is providing an update on the performance of its business in the first three months of 2022
EFG achieved a solid operating result during this period. While growth momentum from late February to the end of March was impacted by the challenging market environment, growth trends have recovered in April.
EFG has also announced that Boris Collardi is being proposed as a new member of the Board of Directors and intends to buy approximately 3.6% of EFG International shares from t Dr. Spiro J. Latsis.
EFG's revenue-generating Assets under Management decreased to CHF 166.7 billion at end-March 2022 from CHF 172.0 billion at end-2021. The decline in Assets under Management in the first three months of 2022 was driven by negative market performance of CHF 6.9 billion due to the challenging market environment, partially offset by positive net new asset inflows and foreign exchange.
In terms of net new asset development, the war in Ukraine and volatile markets led to deleveraging and de-risking by clients across most regions, impacting the net asset inflows in late February and March. Net new asset growth normalised in April. On a year-to-date basis, annualised net new asset growth exceeded 2%, while excluding the deleveraging effect, the annualised net new asset growth rate exceeded 4%.
EFG achieved a solid operating result in the first three months of 2022, with operating revenues at similar levels to the prior-year period. Revenue generation in the first three months of 2022 was marked by uncertain and volatile markets, which led to lower client trading activity that affected brokerage income, while rising interest rates have only just started to provide tailwinds in terms of net interest income. At the same time, EFG has maintained its disciplined approach to costs and has started to benefit from the streamlining of its footprint and other cost management actions completed in 2021.
EFG has no presence in Russia, Belarus or Ukraine. Its direct exposure to Russian issuers, and its related counterparty risk and credit risk are marginal. Assets under Management from Russian nationals domiciled in Russia account for approximately 2% of EFG's total Assets under Management. EFG is not accepting any new business from Russian clients domiciled in Russia.
EFG capital and liquidity position remains strong. At the Annual General Meeting of EFG International, EFG shareholders will vote on the approval of the distribution of a dividend of CHF 0.36 per registered share (exempt from Swiss withholding tax). In light of its strong capital position and to reduce the dilution of existing shareholders, EFG's Board of Director's has decided to repurchase up to 2.8 million EFG shares. The repurchase will be effected through open market purchases executed in a market-sensitive manner by a third party over a pre-defined period of time. This planned repurchase of shares has the sole purpose of funding employee incentive plans.
"Giorgio Pradelli, CEO of EFG Following the recovery that we have seen in April, both in terms of net asset inflows and client trading activity, EFG is well positioned to continue on its profitable and sustainable growth path. Twelve consecutive quarters of net new assets show that we stayed close to our clients in this challenging environment as a trusted partner, offering expert advice and comprehensive services."
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