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By Brenna Hughes Neghaiwi
ZURICH, Nov 16 (Reuters) - EFG International attracted net inflows from July to the end of the October for the first time since the Swiss private bank bought BSI bank in early 2016.
EFG said on Thursday it saw net inflows of 500 million Swiss francs ($506 million) in the period, raising assets under management to 147.5 billion francs. That was despite outflows of 1.5 billion francs related to the integration of BSI.
Some outflows were expected to continue into the first quarter of 2018, the group - which last month announced a change of leadership in 2018 - added.
EFG’s shares were seen opening up 2 percent according to pre-market indications by bank Julius Baer.
EFG agreed to buy rival Swiss bank BSI Ltd from Brazil’s BTG Pactual in February 2016 to nearly double in size so it could compete better in Switzerland’s crowded private banking market.
But Lugano-based BSI has been mired in legal problems, chiefly related to transactions linked to the scandal-hit Malaysian sovereign fund 1MDB, which resulted in the closure of BSI’s Singapore branch last year.
Following billions of dollars of client withdrawals last year, wealthy EFG customers withdrew a net 5.5 billion Swiss francs in the first six months of 2017.
The bank in July said it was unlikely to hit its target for net new money growth of 3 percent to 6 percent until 2019 as clients continued to withdraw funds from BSI.
“Since the announcement of the first-half 2017 results in July, EFG International continued to make significant progress in the integration process and is on track to complete the platform migration of the remaining former BSI businesses before year-end, concluding the overall integration process,” the Zurich-based bank said in a statement on Thursday.
The integration of technology platforms into one core IT system is expected to contribute significantly to targeted cost savings of 240 million francs, the group said.
It has so far made significant progress on targeted pretax cost reductions of 50 million francs for the year, including by lowering its headcount, it said.
The bank said it had achieved solid underlying profitability and revenues in line with the first half of the year.
$1 = 0.9889 Swiss francs Reporting by Brenna Hughes Neghaiwi; Editing by John Revill and Mark Potter