EFG International reported a net loss attributable to shareholders, under IFRS accounting rules, of SFr6.0 million ($6.64 million) in the first six months of this year due to one-off legal charges and provisions related to a US tax program.

Zurich-listed EFG International reported a net loss attributable to shareholders, under IFRS accounting rules, of SFr6.0 million ($6.64 million) in the first six months of this year due to one-off legal charges and provisions related to a US tax program.

When those charges are stripped out, the firm’s underlying net profit was SFr57.6 million, down a touch from the SFr60.3 million figure reported a year ago, it said in a statement today.

The legal charges and provisions included SFr30 million connected to the US Tax Program involving Swiss banks, over which EFG is in “advanced discussions”, it said. The US-Swiss program offers banks a range of categories to enter, under which they can state whether they are at risk or not or having breached laws on providing US citizens with undeclared offshore accounts. The SFr30 million figure is made up of additional legal and professional costs of SFr8.6 million and SFr21.4 million representing the firm’s best estimate of the final penalty the US might impose, it said.

Another cost that affected the headline result were SFr33.7 million of litigation-related charges and provisions concerning a long-running dispute in Switzerland, as announced in April this year, EFG said. “After two unexpected legal decisions in the past year, EFG International has reassessed its litigation strategy, based on second opinions from external law firms. Based on their findings, it was deemed prudent to set aside a further SFr7.4 million in relation to ongoing litigation,” it said.

Operating income stood at SFr342.9 million, a rise of 4 per cent from a year earlier, partly offset by a 4 per cent rise in operating costs, mainly driven by the cost of growth initiatives, the firm said.

Core private banking performance improved, EFG International said, with operating income up 5 per cent year-on-year, and the profit contribution rising by 26 per cent.

Revenue-generating assets under management stood at SFr80 billion at the end of June, up from SFr75.9 billion at the end of last year.

There were net new assets of SFr2.7 billion, up from SFr1.9 billion a year ago. The UK, Asia and Continental Europe all delivered double-digit growth rates, it said.

The number of client relationship officers stood at 456 at the end of June, a gain from 416 CROs a year before.

The firm’s Basel III BIS Capital Ratio, a key benchmark of a bank’s financial strength, was 18.7 per cent at the end of June, rising from 18 per cent at the end of December last year.