In this EFG International review, we’ll learn about the history of EFG bank, its private banking and investment services, plus the benefits and risks of the platform. Additionally, you will discover how EFG International can fit into your offshore banking solutions strategy.
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Who is EFG International?
EFG International, a Zurich-based private bank founded in 1995, offers global private and institutional clients full investing, wealth, and credit solutions. It has 40 locations across Europe, Asia Pacific, the Americas, and the Middle East. Over 650 seasoned Client Relationship Officers are among the bank’s roughly 2,700 workers.
Since launching under the EFG name in 1997, the bank has grown from an upstart into a leading Swiss private bank by focusing on advising skills and a worldwide outlook.
As of the end of 2022, EFG International managed 143.1 billion Swiss francs in assets. The bank boasts a strong capital position and a highly liquid balance sheet.
A major shift occurred in Swiss private banking between 2016 and the end of 2018, when BSI was acquired and successfully integrated. EFG International’s 2022 strategy plan prioritized profitable and sustainable expansion, capitalizing on the company’s increased size and scale to strengthen its competitive market position.
EFG International has been financially stable since 2005 thanks to its listing on the SIX Swiss Exchange. The bank’s mission is to be its clients’ preferred independent partner by providing them with a full spectrum of wealth management services and investment options.
The Latsis family owns a majority stake in EFG Bank European Financial Group, while Brazilian investment bank BTG Pactual is also a big shareholder in EFG International.
EFG Private Banking
Investment, wealth, and credit solutions are only some of the private banking services provided by EFG International to both individuals and businesses.
Investment Services
When it comes to creating a personalized investment plan, EFG International can help regardless of a client’s risk aversion, investment horizon, or preferred asset classes. The bank provides a selection of investment options so that it can meet the needs of various customers.
EFG bank offers discretionary mandates for people who would rather have trained experts make financial decisions on their behalf. With these directives in place, a methodical investment process is used to implement strategies that are in line with the client’s investment goals and tolerance for risk.
However, EFG private bank also accepts advisory mandates from clients who choose to continue managing their own portfolios while receiving investing guidance. Clients can take advantage of the advice of the bank’s specialists and tap into their experience through these mandates.
Advisory Solutions
The professionals at EFG International are committed to advising and assisting customers in making educated choices. Predicting market trends can be difficult in times of high market volatility and unpredictability. However, with EFG’s guidance, clients can better able to manage their assets and diversify their portfolios.
Investors can consult with EFG’s team of experts, who will work with them to develop individualized strategies. These experts regularly discuss novel investment prospects and provide analysis of established investment methods.
Clients may make educated choices based on up-to-date data and competitive bids thanks to stringent monitoring and selection procedures. To assist clients in efficiently managing risks and capitalizing on emerging opportunities within their established risk/return profile, EFG does a comprehensive study of each client’s risk profile and investment objectives.
Discretionary Mandates
EFG Bank’s portfolio managers employ innovative techniques of asset management. Clients can feel safe entrusting their assets to seasoned industry experts, giving them more time for what really matters to them.
When it comes to wealth management, EFG provides customers with cutting-edge and individualized discretionary mandates. The investment goals and risk tolerance of each client are taken into account when developing these mandates to guarantee that the resulting performance is in line with the customer’s expectations.
By taking this strategy, clients can rest easy knowing that their investments are being closely watched.
Alternative and Private Market Investments
Since its recognition as a separate asset class, alternative investments have exploded in popularity among both individual and institutional investors. The fact that they rarely move in tandem with the stock or bond markets is a major selling point for these investments.
By tapping into its extensive international network, EFG bank is able to connect clients with a diverse set of alternative investment specialists and top service suppliers.
• Hedge Funds — These are investment vehicles that aim to profit on market inefficiencies irrespective of the prevailing trend. Their benefits include increased portfolio diversity, reduced volatility, and the possibility of increased returns during times of market instability. With their wealth of knowledge, EFG International can offer their clients access to closed, high-quality Multi-Manager products. The Advisory or Discretionary mandates provide direct access to their whole directory of individual managers in UCITS format.
• Private Markets — EFG International provides end-to-end guidance and services for the private sector. They help their customers build their businesses, make acquisitions, and introduce new products. CERES is one of their unique programs that makes vintage investments internally.
• Real Estate — EFG offers complete real estate advice services & products. All industries and geographies are represented in their product catalog, and access can be gained either directly or indirectly. Funds and other investment vehicles controlled from the outside that put money into equity or debt issued by real estate companies may fall under this category.
Advanced Investment Solutions
To help clients maximize their investments, EFG Bank offers a variety of alternatives, such as structured products and trading services. The bank suggests structured solutions because they are flexible and can be tailored to match individual needs.
These products’ returns are tied to underlying investments, so they carry the potential for both upside gains and downside protection. Everything is neatly packaged and simple to use. To take advantage of niche opportunities that call for in-depth technical or structuring expertise, structured products might be useful when clients have more nuanced needs.
EFG Bank also has extensive experience creating investment solutions and lending facilities that are compliant with Sharia law. The bank has a long history of providing services that adhere to Sharia law. Discretionary mandate portfolios and advisory services are provided to clients, with both strategies including Sharia principles. These Islamic options are a key part of EFG Bank’s commitment to corporate social responsibility.
Wealth Services
Wealth Planning
The extensive internal and external wealth solutions provided by EFG International allow the bank to aid its customers in both the management and growth of their wealth. They provide services to help you prepare for the worst in political and economic situations, set up a clear succession plan, or do both.
Using their knowledge in intricate areas and taking into account multi-jurisdictional and open-architecture approaches, EFG International also offers bespoke wealth planning services in a number of jurisdictions. Inheritance and succession planning, asset structuring, and even uprooting are all part of this category.
EFG International takes a comprehensive, one-stop-shop approach to meeting the unique requirements of each of its clients through its wealth planning services.
Trust Services
The EFG Wealth Solutions Trust unit uses trusts, companies, and foundations to efficiently structure, safeguard, and transfer money. The division’s main office is located in Jersey, Channel Islands, and it has satellite locations in both Singapore and the Bahamas.
Their goal is to offer outstanding support to their customers through a blend of in-depth knowledge, friendly service, modern tools, and proactive, useful thinking.
The division’s vast international experience and expertise allow them to service clients with a wide range of assets and interests all over the world. Together with their clients’ legal and tax consultants, they craft unique strategies to secure assets and ease the transfer of wealth from one generation to the next.
Asset protection, retaining family money, protecting the interests of vulnerable beneficiaries, and funding charity or philanthropic efforts are just few of the many uses for trusts. In addition to acting as trustees, this department also provides assistance in the formation, management, and administration of various trust structures in accordance with client specifications and relevant tax and legal concerns.
Their experts can serve on boards of directors and as officers of corporations or as trustees of charitable organizations. They take on all managerial and supervisory duties and offer full administrative and accounting support.
EFG Funds Services
As a subsidiary of EFG Wealth Solutions, EFG Fund Services focuses on serving numerous closed-end and open-ended funds with administrative, custody, and exchange listing services. Offices for this department can be found in Jersey, Luxembourg, Cyprus, the Cayman Islands, and Singapore, with those being the primary ones.
As a result of its global reach, EFG Fund Services is able to provide its clients with flexible, individualized solutions that are applicable in any jurisdiction.
EFG Fund Services blends technology-driven solutions with a pragmatic and proactive attitude in order to provide outstanding customer service. The department recognizes that each fund is different and collaborates closely with its clients to learn all about the fund’s needs and the goals of its investors.
All asset classes are covered by EFG Fund Services’ extensive menu. The division offers director services, supports with the establishment and launch of funds, and manages day-to-day administrative responsibilities. Bookkeeping, financial reporting, capital account administration, and other investor communications are all part of what fund accountants do.
As a custodian, EFG Fund Services is responsible for keeping the funds’ money safe, reconciling the funds’ bank accounts, and doing other similar duties. This department’s dedication to its clients’ success is shown in the high standards of service and productivity it applies to its clients’ funds and investors.
Credit and Financing
EFG International offers local and global property and investment financing guidance.
Investment Financing
EFG offers many financing alternatives, including overdrafts on checking accounts to meet immediate cash flow needs. Overdraft interest rates are variable and determined by market conditions to be both flexible and responsive to customers’ ever-evolving financial needs.
Fixed term loans are another option for financing that is provided by EFG. These loans normally have a fixed tenor of between one and twelve months. However, lengthier tenors may be offered in exceptional circumstances. Fixed-term loans have market-based interest rates. These loans can be renewed, providing ongoing financing.
Credit exposure in over-the-counter and exchange-traded derivatives is another area of expertise for EFG bank. To help its clients better control their risk exposure, the bank provides credit facilities to back their derivative trading activity.
Additionally, EFG’s financing options include bank guarantees. A bank’s guarantee of its customer’s ability to meet certain commitments or make certain payments is a sort of credit insurance. Clients engaging in a wide range of commercial transactions can rest easy with the reassurance and risk reduction afforded by bank guarantees.
Property Financing
To help its domestic and international clientele make smart real estate investments, EFG International offers an array of flexible financing options. The bank counts on a group of highly trained experts with international experience to assist its customers at every step.
The allocated customer Relationship Officer works closely with these specialists to provide the customer with personalized finance assistance. Property financing is an extra service offered by EFG International alongside its private banking services in a number of regions.
Islamic Financing
EFG Bank has a strong track record in developing Investment Solutions and Credit Facilities that adhere to Sharia law. This gives customers access to a wide variety of credit and fixed-term deposit alternatives, including the unprecedented chance to back Murabaha deals with real estate in the United Kingdom, notably prime central London real estate.
Banking Services
Customers can choose the most convenient method of contact and update frequency for receiving information about their banking account. Different sorts of tax statements, in accordance with local requirements, are available from EFG International.
The bank offers a selection of accounts, including current accounts used for regular banking and foreign currency accounts. EFG International also accepts bank cards, including Maestro cards and a number of different credit card choices.
EFG bank gives customers who want to buy or sell precious metals the option to do so either through a metals account or by purchasing the metals itself. Safekeeping services for valuables such as securities, documents, jewels, and artwork are also available.
The bank offers a full range of FX services, from spot and forward contracts to vanilla and exotic FX options, interest rate derivatives, and yield improvement techniques. To better serve its customers, EFG International offers structured deposits with returns tied to currencies, interest rates, or equity indices.
The company also gives its clients trading services that provide access to closed pools of liquidity and various financial instruments across many marketplaces. Using a best execution strategy as their compass, the bank’s professional traders provide fast, accurate, and high-quality service across all asset classes and global markets.
Independent Asset Managers Services
Through their offices in Switzerland and Asia, clients of EFG International have round-the-clock access to their trading rooms. The bank also helps clients set up Private Label Funds, which can be distributed internationally via its Luxembourg office while still adhering to local requirements.
The issue of new products for clients is made possible by EFG International’s strong alliances with industry leaders and structured product platforms. The bank maintains a policy of constant investment in its infrastructure and offerings, both to adapt to new regulations and to keep pace with developing technologies.
A Portfolio Management Agreement is signed when the Independent Asset Manager and the customer have agreed upon an investment plan. The Independent Asset Manager will use this agreement to place purchase and sells orders with EFG.
Accounting, multi-asset processing and settlement, revenue collection, corporate actions, proxy voting, and class actions are just a few of the many facets of account management that EFG International offers.
The bank’s asset management services include wire transfers of cash and securities, access to the trading floor in real time, processing of OTC derivatives, Private Equity Funds, securities lending, processing of foreign funds, collateral management services, and Murabaha Deposits.
EFG International provides fiscal reporting, tax reclaim services, and tax relief at source among other tax services. Funds reporting, performance analysis reports, account consolidation within the EFG Group, and maturity analysis reports are just some of the reporting services provided by this bank.
How does pricing look like?
EFG International provides Independent Asset Managers and their clients with a range of pricing options from which to choose. An ‘all-in’ fee is offered to clients, which takes into account the average value of the client’s entire portfolio (equities, cash, and fiduciary deposits) and includes brokerage and administration costs. They can, instead, go with a methodology that adjusts prices based on the specifics of each service or product.
The retrocession models and ‘0’ retrocession models made available by the bank enable additional fee reductions for customers. To ensure transparency and conformity with regulatory standards, EFG International uses the ‘0’ retrocession model for Independent Asset Managers that are MIFID II compliant.
eBanking
EFG International’s eBanking platform allows for convenient, protected account access from any location. Account activity, payment initiation, and comprehensive asset analysis are all simplified for the user. In addition, EFG offers its clients the SecureMail service for safe, encrypted email and file sharing with their designated Client Relationship Officer.
EFG provides an intuitive and trustworthy portfolio management system for lone investors and asset managers. The platform offers an array of tools for clients to keep tabs on their holdings, analyze how those holdings compare to one another, trade stocks, and compile individualized reports. These reports can incorporate aggregated data for related entities, giving readers an in-depth picture of the portfolio’s health.
EFG bank’s financial information service gives prices of shares listed on major stock exchanges in Europe, the US, and Asia. Bond and derivative pricing, currency quotes, money market statistics, and financial market news are also provided so that customers may keep up with the latest industry developments.
Moreover, EFG International provides an XML Download Service for financial intermediaries that already utilize their own in-house portfolio management software. This solution allows for a more streamlined approach when it comes to managing client portfolios and everyday transactions.
EFG Asset Management
Through its EFG Asset Management (EFGAM) division, EFG International serves private clients, institutional investors, and financial intermediaries globally by providing them with actively managed investment products and services.
Bank clients have access to investment options, such as multi-asset and alternatives strategies, as well as the bank’s own New Capital fund family.
In January 2023, EFGAM was responsible for managing about $26 billion in client assets.
Environmental, social, and governance (ESG) integration is important to EFGAM since it aligns with the firm’s commitment to responsible investing. The bank maintains that accounting for ESG considerations when making investments is the most transparent way to satisfy investor needs.
Taking into account ESG factors allows EFGAM to match its investments with sustainable and ethical standards, which reflects the changing tastes of its clients.
Pros and Cons of EFG Bank
Having offices in so many different places means that customers from all over the world can take advantage of EFG Bank’s services and knowledge. The bank’s primary clients are those with substantial disposable income.
US credit rating agency Fitch said in a ratings action commentary in April 2023 that EFG Bank has created a strong franchise due to the bank’s high quality assets, conservative underwriting criteria, and healthy liquidity. The bank is making great strides toward achieving its goal of increased cost efficiency, which will ultimately strengthen its business model.
By streamlining its legal entity structure and minimizing its geographic footprint, it has successfully mitigated risk associated with legacy assets and non-strategic enterprises. So, the business model of EFG Bank is shifting to prioritize its strengths and the most profitable operations, according to Fitch.
While EFG Bank does provide certain commercial loans and maintains a limited portfolio of residential mortgages, Fitch considers all of these to be high-risk investments. As a result of their relative small size, however, these portfolios have a negligible effect on the bank’s asset quality rating.
Interest rate swings, stock market swings, and economic downturns are just a few of the market risks that EFG Bank faces. The value of client portfolios may be affected by the aforementioned market conditions, which may in turn affect the performance of assets.
Potential threats to the bank come from credit problems including loan and investment defaults. In addition, Fitch points out that EFG Bank has a special exposure to longevity risk because of its legacy portfolio of life insurance contracts. Such risk is diminishing though and is unlikely to be material within a reasonable time frame.
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