EFG CEO on Business Outlook & Strategy

It's a great deal of uncertainty when it comes to banks and financial services at the moment, right. Are you feeling that across your business? Good morning and thank you for having me. So, yeah, we see a lot of we see a lot of business at the moment. I think it's it's a good market environment for a private bank. I think we're navigating well. You know, interest rates are high, which for a bank is not, is not bad. Markets are doing are doing well, performance are good, the economy is resilient. So overall we see a good environment. What about your business in Asia? Our business in Asia actually is doing extremely well for us. Asia is a strategic region is actually the second largest. The largest region is Switzerland and Italy, but Asia Pacific is the second largest with over 30 billion. But at the moment is growing very, very fast both in Australia and in Singapore and Hong Kong. Last year we had double digit growth rates about 12% in terms of NNA and this compares to our target range of four to six, so basically double the top end of the curve. So we're very pleased with our with our business and to close we have been investing, we have been investing very much in in the region in all the, in all the locations that where we are in. Tell us a little bit about the Swiss business in particular given that we saw the 2nd consecutive rate cut by the SMB last week. No, I think, I think you know, we are in an environment where I believe rates will come down. I was following the the previous commentator talking about the Fed. Obviously there is a big debate, but Switzerland, you know, in terms of wealth management and private banking is probably one of the strongest financial centers worldwide. And in the overall ecosystem of private banking, wealth management is doing very well. We are doing very well. We are growing. But clearly, you know in Europe at the moment, wealth creation is not at the same rate as as in Asia. But otherwise we are very pleased with both businesses. You talked about investments earlier and of course we have seen the reports of a potential merger between you and Julius Baer. What can you tell us about your thinking in regards to a deal that could look like this? I know that you potentially can't really talk specifically about Julius Bayer, but what would the concept like this entail for you? Well, I think there have been a lot of speculations I think since it was I believe at the end of May. And and again you know, we don't comment on market speculations actually we like to respond with facts. A few days later on the 20th of May, we came out with our trading update for the first four months of the year, which was very good. You know our growth is over 7% globally, which is the highest in the last 15 years. And our profitability is very strong in excess of 110 million net profit for the first four months, which indicates a double digit profit growth for for this year. Regarding consolidation, I think you know there is a lot of talk about consolidation in our industry. But at the end at the moment the MNA landscape is relatively dry. We saw this last year big consolidation which was more forced for us. We like acquisitions and actually the last acquisitions we have done, the last important acquisition we have done was five years ago in Australia. We acquire show and partners which has been a great, great investment, a great partnership. And you know we are extremely happy about other possible speculation. You know we have so many things to do. We try to focus on what we have to do more than speculate about scenarios that you know might not happen. But it sounds like the appetite for M&A growth is still a focus, right. Can you kind of give us some insight into what you would be looking for hypothetically if you will, and if there are any sort of deals and possibilities and different types of structures that are in the pipeline that might be compelling for the business? Yeah, no. Well first of all, you know our, you know, we are in the middle of our strategic cycle 20/23/2020 five. We are exactly, you know, in the middle. When we announced our strategic cycle for 2025, we said that obviously the focus is organic growth. On the other hand, we like M&A. We like the ability to grow inorganically and we have 3 criteria which are very simple. We like to focus on the locations where we already present in order to generate synergies. We like to have a cultural fit. We have a very specific client centric business model. So you know it has to fit and and the third is obviously you know the acquisition has to be accretive and we have a return on investment over three-year of 10%. So if we can find a combination with this criteria, we like to look at opportunities. But as I was saying the last five years, the last one was showing partners great investment. We're very proud. But since then we didn't find a lot of opportunities. We will see, we'll see now in the next chapter, in the next second-half of our strategic plan. Well, you're in Singapore. Are there any good fits across Asia? Well, you know, we, we like, we like Asia. We would Love Actually to, to, to strengthen our presence in Hong Kong and, and Singapore. As I said, in the last five years, we had a couple of opportunities that we looked at, but we didn't manage to close. As I said, at the moment there is not, I would say, a wave of opportunities, but we are very, very focused on looking into and screening the market, but nothing at the horizon concretely, I'm afraid.