EFG International has agreed to sell to Notenstein Private Bank (a subsidiary of Raiffeisen Switzerland), subject to regulatory approvals, its remaining stake of 20.25% in EFG Financial Products for CHF 70.2 million (1,350,000 shares at CHF 52 per share, compared with the IPO price of CHF 45). The transaction is expected to complete during the first half of 2013, and is in keeping with EFG International's desire to focus on its core business of private banking.
Upon closing, EFG Financial Products will be deconsolidated from EFG International. In addition, EFG International's representatives on the board of EFG Financial Products will step down at closing (although Patrick de Figueiredo, Chief Risk Officer of EFG Group, will remain, but as a representative of the founders).
EFG International will continue to access EFG Financial Products' structured investment products expertise as a white-labeling partner. In this context, while unsecured credit facilities will cease upon closing, it will continue to provide a secured credit line. It will also provide transitional support to EFG Financial Products until the end of 2013. EFG Financial Products will discontinue using EFG in its name by end-2013 at the latest.
This transaction is expected to result in an exceptional accounting gain of approximately CHF 37 million in EFG International's 2013 financial statements. Taking this and the deconsolidation into account, EFG International's pro forma Basel III fully phased in BIS Total Capital Ratio would have increased from 15.9% as of 31 December 2012 to 17.5% (CET1 12.8%).
EFG International is a global private banking group offering private banking and asset management services, headquartered in Zurich. EFG International's group of private banking businesses operates in around 30 locations worldwide, with circa 2,300 employees. EFG International's registered shares (EFGN) are listed on the SIX Swiss Exchange.