Dear shareholders,

2023 saw more benign conditions in financial markets than in the prior year but it was also a period of renewed challenges and brought many unforeseen developments that caused disruption both in Switzerland and abroad.

The banking crisis in spring 2023 created turmoil in financial centres on both sides of the Atlantic and served as a stark reminder that trust and resilience are the most important factors for long-term success in the banking business. Geopolitical tensions escalated further in the course of the year and we witnessed the tragic events related to the ongoing wars in Ukraine and Gaza.

Looking at the operating environment from a macro-economic perspective, we were confronted with weakening global growth, an uncertain inflation path and tightening financial conditions. At the same time, we continued to see the emergence of significant new opportunities – but also risks – from megatrends such as generative AI and sustainable development that are transforming our world.

As a globally active private banking group, we know that in this type of volatile, uncertain, complex and ambiguous market environment, it is more important than ever to stay close to our clients, acting as a trusted adviser and partner to them – offering insights and solutions to ultimately create value.

Despite the turmoil facing our entire industry in 2023, this was also a period of strong progress for EFG as we successfully and consistently delivered against our 2023-2025 strategic plan that is aimed at sustaining profitable growth and achieving scale. We delivered record IFRS net profit of CHF 303.2 million for the full year 2023 (+50% compared to 2022) and a return on tangible equity (RoTE) of 18.2%. We recorded net assets inflows of CHF 6.2 billion in 2023, corresponding to a growth rate of 4.4% – demonstrating the high level of trust that clients place in EFG. While recurring revenues were impacted by more subdued client activity in 2023, tailwinds from rising interest rates benefited our net interest income.

At the same time, we have maintained our disciplined approach to costs and reported a cost/income ratio of 73.3% for 2023, a significant improvement from 76.0% in 2022.

EFG has maintained strong capital and liquidity positions that are well in excess of the regulatory minimum requirements. At end-2023, our CET1 capital ratio stood at 17.0% and our liquidity coverage ratio was 230%. This solid balance sheet is the result of our rigorous strategic approach to ensure EFG’s operational and financial resilience in an uncertain environment. To maintain our current positive momentum, we are building on our client-centric and well-diversified business model and are making strategic investments in our future growth.

Investing in the future

In 2023, we made significant investments to expand our talent base and client coverage. In particular, EFG continued to attract experienced bankers, bringing the total number of new Client Relationship Officers (CROs) hired in 2023 to 141, compared to our ambition of 50-70 per year. Our new CRO colleagues already made a strong contribution to asset inflows in the second half of 2023 and we expect this trend to continue and to significantly accelerate our growth momentum in 2024 and beyond. With talent on the move across many financial centres, we are also recruiting for key roles in our corporate functions.

To further improve the client experience while increasing operational efficiency and scalability, we are also making targeted investments in digitisation. We spent the past few years focusing on enhancing our core systems and processes, and successfully upgraded the core banking platform in all our private banking locations. Now we want to further strengthen connectivity between our CROs and our clients, thus also improving efficiency and productivity. Digital solutions will also help us to reinforce our operational resilience.

The challenges that our industry has faced in recent years have underscored the fundamental importance of responsible business conduct as well as of robust compliance and risk management frameworks. We will continue to remain extremely focused on our operational and financial resilience, as they are the core foundations of our lasting success.

In today’s competitive market environment, having a strong brand is an important differentiating factor. In 2023, EFG was named as one of the 500 most valuable and strongest banking brands worldwide for the first time in the annual ranking published by Brand Finance and The Banker. We continue to build one of the leading brands in the private banking industry. Going forward, we will continue to shape and differentiate our brand profile across key markets.

The strength of our brand and of EFG as a whole is a testament to our ability to deliver on our purpose “empowering entrepreneurial minds to create value – today and for the future”. Our purpose is designed to guide us through the current strategic cycle and beyond. To position ourselves for long-term success, and to meet the evolving needs of our clients, employees and other stakeholder groups, sustainability has become a key consideration for EFG. Over the next few years, our industry will witness the biggest wealth transfer in history, and for the next generation of clients and investors, sustainable value creation will be an essential requirement. Information on EFG’s approach to sustainability and the progress we achieved in this area in 2023 is provided in our Sustainability Report 2023.

Private banking and wealth management remain an attractive industry that is growing across geographies and segments. While the operating environment is expected to become somewhat more challenging in 2024, we believe that we are well positioned for further growth, irrespective of short-term challenges, including the effects of the global interest rate cycle. In terms of profitability, 2024 will be a year of consolidation where the full cost of the strategic investments will be recognized, we remain confident to achieve our targets for 2025 and generate long-term value for our stakeholders.

EFG has a progressive dividend policy and we plan to continue making attractive distributions to our shareholders, with a target payout ratio of around 50% of net profit. The payment of an ordinary dividend of CHF 0.55 per share (exempt from Swiss withholding tax) for the financial year 2023 will be proposed to the Annual General Meeting of 22 March 2024. This corresponds to an increase of 22% compared to the previous year.

We remain committed to delivering the best possible performance each and every day to inspire trust in our clients and achieve the best possible outcomes for all our stakeholders. Our strength and solidity, combined with our entrepreneurial mindset, agility and strong sense of partnership, are more important than ever in times like these.

We wish to take this opportunity to express our gratitude to our 3,000 colleagues around the globe for their hard work and dedication. We also want to thank our clients, you, our shareholders, and our other stakeholders for the trust in EFG and your valued support.

Best regards