EFG International reports a robust performance in 2008

Key elements summary

EFG International delivered a robust financial performance, on a consolidated basis, in the year ended 31 December 2008. Key elements:

• Net profit, adjusted for non-recurring items (principally relating to life settlement policies), was CHF 280.9 million, down 15% year-on-year, on revenues of CHF 1,005 million, up 10%.

• Net profit, including non-recurring items, was CHF 221.9 million, down 33% yearon- year, on revenues of CHF 946.3 million, up 4%.

• Non-recurring items totalled CHF 59 million, principally relating to adjustments to the value of life settlement policies on account of changes to life expectancy and current market conditions. This represents a prudent approach, and leaves EFG International holding a diversified portfolio of life policies marked at an attractive yield of circa 11%.

• Operating expenses excluding amortisation and depreciation expenses increased by 26% to CHF 657.8 million. Of the increase of CHF 137 million, CHF 66 million related to acquisitions, the balance to organic growth initiatives and CRO hiring.

• The cost-income ratio was 65.4% (69.5% before adjusting for non-recurring items), up from 57.0% a year earlier.

• The number of Client Relationship Officers (CROs) increased to 726 (including acquisitions). Over the last 12 months, the number of CROs rose by 172 (of which all but four related to organic hiring), up some 31% year-on-year.

• Clients’ Assets under Management were CHF 77.2 billion as at 31 December 2008, down from CHF 98.3 billion (including announced acquisitions) as at end-2007. Excluding EFG International shares which do not form part of the current 34% freefloat of EFG International shares at the SIX Exchange, clients’ Assets under Management amounted to CHF 75.4 billion as at 31 December 2008, down from CHF 94.0 billion (including announced acquisitions) as at end-2007. This reflects adverse market (CHF 21.3 billion) and currency (CHF 11.3 billion) effects. The increase in clients’ Assets under Management due to acquisitions was CHF 800 million (Sycomore Gestion Privée).

• Private banking inflows for the year were CHF 18.2 billion. Total net new assets and the increase in clients’ loans were CHF 13.2 billion (of which loans: CHF -0.5 billion). This compares with CHF 13.8 billion (loans: CHF 2.0 billion) for 2007. The overall figure was constrained during H2 2008 by hedge fund redemptions and the impact of deleveraging.

• Clients’ Assets under Administration stood at CHF 8.8 billion as at 31 December 2008, up 2% year-on-year. Total clients’ Assets under Management and Administration stood at CHF 86.0 billion at end-2008.

• EFG International’s specialist product businesses, C.M. Advisors and Marble Bar Asset Management, while impacted by redemptions and deleveraging (CHF 3 billion), were both highly profitable and delivered investment performance significantly above average for their sectors. EFG Financial Products, although only operational since December 2007, broke even for the second half of 2008.

• EFG International’s revenue margin was 1.12% of average clients’ Assets under Management (1.06% before adjusting for non-recurring items). This compares to 1.19% for 2007.

• EFG International’s total balance sheet size was CHF 18.9 billion as at 31 December 2008, compared with CHF 18.0 billion as at end-2007.

• As at 31 December 2008, the BIS Tier 1 capital ratio stood at 13.2%, up from 11.3% at mid-2008. At end 2007, it was 14.6%, taking into account committed acquisitions. The reduction year-on-year was primarily due to negative currency effects on the capital of foreign subsidiaries. Shareholders’ equity stood at CHF 2.3 billion.

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