In October 2011, EFG International began major restructuring of its business; this has led to refocusing on what has always been its traditional model, private banking. During this time, its investment strategy has changed, it has moved away from marginal businesses, it has reviewed the entire business of the company, it has liquidated its exposure to Greece, it has improved the productivity of its bankers dispensing with those who were not productive and improving the figures of those who remained. During this phase, all efforts have been focused on leading the company "onto the right path", as explained by its CEO, John A. Williamson, in an interview with Funds Society.
As part of this restructuring process, part of EFG Financial Products was made public in October and its remaining stake, 20.2%, totaling 70.2 million Swiss francs (about 74 million USD) was recently sold to Notenstein Private Bank.
With all this restructuring completed and with the business redirected towards its traditional model of private banking, the Swiss bank, based in Zurich, is enjoying a period of rapid growth, in which Latin America is one of the main players, as explained to Funds Society by EFG Capital president, Victor M. Echevarria.
Echevarria said that of the 3,000 million Swiss francs which the bank received in new assets in 2012, 500 million were in Latin America, representing a growth of 4%. For this year, the aim is to increase the growth from 4% to 8%, which means doubling the assets acquired to reach 1,000 million dollars under management. EFG has been present in the region for 17 years and 15% of the bank’s total assets, i.e. 11,800 million Swiss francs (12,500 million USD) are in Latin America, according to final data for 2012.
Williamson and Echevarria explained that one of the priorities in the short term is to assemble an advisory panel specialized in Latin American credit in Miami. On a global basis, they have 100 consulting professionals worldwide, of which more than 12 are in EFG Capital’s Miami office.
“We are back to our original business. We have a good model for enterprising people and we believe we offer a platform which is much better than others. This is our business and we don’t want to become distracted,” Williamson emphasized.
In full process of recruitment
In this respect, he added that although during the past year they had dispensed with the services of some bankers, a move which was part of the company’s aforementioned restructuring process, they are currently recruiting new teams and bankers to keep growing. “We are looking to expand our resources and relationships with private bankers in Latin America,” he said.
A few weeks ago Carolina Montiel and Arturo Neto, both from HSBC in Miami joined their ranks within the Investment Strategy department, Carolina Montiel has been appointed as head of the department.
“We don’t push our company’s product”
Williamson wanted to make it clear that EFG doesn’t tell bankers how they have to develop their business model. “They are free to build and run their own business. To develop their business as they see fit”. He added that the consultant is free to choose where they want to operate from and what products or vehicles to choose. “We don’t push our company’s product, particularly given the current regulatory situation. What we do expect is for people to be profitable and we pay a lot of attention to risk control,” he stressed.
He also added that in this respect, their business model is neither in line with that of the broker, nor with the discretionary management business. According to EFG’s CEO, a private banker should be able to build and run their own business as well as being flexible and quick to face the current market conditions. “The bank’s top management is one hundred percent focused on this model of private banking,” he said.
Meanwhile, Echevarría said that after the restructuring, and once out of marginal businesses and some risk positions, they find that many people are labeling them as conservative, although they are not paying this any attention, as he believes that currently their clients are offered great opportunities.
The average EFG Capital Latin America client has 1.5 million dollars, although there is another segment consisting of over 30 clients who are high net worth. A special division for family offices is projected within the group, in addition to the existing trust services in the Bahamas and Cayman islands.
Program for bankers
The company is developing a program to serve as a guideline to counselors on how and where they can operate and where they can travel to, among other issues; this guide shall be up to date and address all regulatory changes and due diligence. “Market risks have changed and we must ensure that our teams have all available means at their disposal,” said Williamson.
EFG is present in Switzerland, Europe, UK, Asia and America and has 88,000 million in assets under management. In Latin America they have a presence in Bogota, Quito, Lima, Montevideo and Punta del Este, although they don’t rule out opening elsewhere. Globally they are present in over 30 locations and have 2,300 employees.