Switzerland's EFG aims to triple profit by 2010 after posting a leap in 2007 results, saying it expected to buy more businesses as the subprime crisis forced rivals out of wealth management.Net profit rose 44% to 332 million Swiss francs ($304.3 million) in 2007, EFG said on Tuesday, beating the average forecast in a Reuters poll of 11 analysts of 305 million francs ($279 million) after minority interests.
EFG also set itself new goals, aiming for net profit of between 800 and 900 million francs ($733 million and $825 million) by 2010, saying its appetite to make acquisitions was unappeased.
“The number of acquisition opportunities is in fact increasing, not decreasing,” the group said.
“Enthusiasm for private banking could wane at some other organizations, which would help in terms of attracting new (bankers), teams, or whole businesses,” it said.
Specialized mid-sized wealth managers such as EFG are poised to benefit from turmoil among larger rivals such as UBS AG and Credit Suisse, whose investment banks have been damaged by subprime losses.
Speculation is intensifying that some larger banks may leave the lucrative niche of managing rich people's money altogether as they concentrate on core banking business.
EFG is a rare example of a private bank whose growth comes mainly from acquisitions, in strong contrast with mid-sized rivals in Switzerland such as Vontobel and Sarasin, whose growth is largely organic.
Last year, EFG bought businesses with joint assets under management of 12.5 billion francs $11.5 billion) last year. For this year, it aims to add another 10 to 15 billion francs ($9.2 billion to $13.8 billion).
Its acquisition appetite would continue beyond this year, EFG said, though it no longer quantified the goal. (Reuters)