EFG has continuously strengthened its liquidity position in recent years and today has a highly liquid balance sheet which no longer requires it to hold the same high levels of available-for-sale investment securities. To reduce volatility in its CET1 capital ratio (management floor of 12%, reduced from 14% previously), EFG has now decided to change its treasury business model for the management of its holdings of fixed income securities to align it with the new capital management framework and liquidity funding model.
As a result, and in line with the principles of IFRS 9, that require a reclassification when an entity changes its business model for managing financial instruments, EFG will reclassify a portfolio of financial assets with a fair value of approximately CHF 5 billion from “financial assets measured at fair value through other comprehensive income” to “other financial assets measured at amortised cost”, effective 01 January 2023.
The reclassified portfolio comprises high-quality fixed income securities. The reclassification has no impact on EFG International’s income statement but would have increased the Group’s CET1 ratio by around 1.3% if this change had taken effect on 30 June 2022.
Detailed information on this accounting change will be provided in the Annual Report 2022 of EFG International, which will be published on 22 February 2023.
* For more details, please refer to the Investor Day 2022 presentation from 12 October 2022 available at www.efginternational.com/ch/investors.html.
Important Disclaimer
This document has been prepared by EFG International AG (“EFG”) solely for use by you for general information only and does not contain and is not to be taken as containing any securities advice, recommendation, offer or invitation to subscribe for, purchase or redeem any securities regarding EFG.
This media release includes forward-looking statements that reflect EFG’s intentions, beliefs or current expectations, targets and projections about EFG’s future results of operations, financial condition, liquidity, performance, prospects, strategies, opportunities and the industries in which it operates. Forward-looking statements involve all matters that are not historical facts. EFG has tried to identify those forward-looking statements by using the words ‘may’, ‘will’, ‘would’, ‘should’, ‘expect’, ‘intend’, ‘estimate’, ‘anticipate’, ‘project’, ‘believe’, ‘seek’, ‘plan’, ‘target‘, ‘predict’, ‘continue’ and similar expressions. Such statements are made on the basis of assumptions and expectations which, although EFG believes them to be reasonable at this time, may prove to be erroneous.
These forward-looking statements are subject to risks, uncertainties and assumptions and other factors that could cause EFG’s actual results of operations, financial condition, liquidity, performance, prospects or opportunities, as well as those of the markets it serves or intends to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. Important factors that could cause those differences include, but are not limited to: changing business or other market conditions, legislative, fiscal and regulatory developments, general economic conditions in Switzerland, the European Union and elsewhere, and EFG’s ability to respond to trends in the financial services industry. Additional factors could cause actual results, performance or achievements to differ materially. In view of these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements. In addition, statements contained in this media release regarding past trends or events should not be taken as a representation that such trends or events will continue in the future. EFG and its subsidiaries, and their directors, officers, employees and advisors expressly disclaim any obligation or undertaking to release any update of or revisions to any forward-looking statements in this media release and any change in EFG’s expectations or any change in events, conditions or circumstances on which these forward-looking statements are based, except as required by applicable law or regulation.
