* FY net profit 339.3 mln Sfr
* Boosted by expected lower price for BSI of 783.9 mln Sfr
* Proposes steady 0.25 Sfr/share dividend
* End-2016 assets under management 144.5 bln Sfr
(Recasts, adds CEO quote)
By Joshua Franklin
ZURICH, March 15 EFG International is
gearing up for a battle with Brazil's Grupo BTG Pactual SA
over the value of BSI Bank, with the Swiss private
bank now expecting to cut the purchase price by more than a
It said on Wednesday it would mark down the price by another
277.5 million Swiss francs ($275.3 million).
EFG's acquisition of Swiss rival BSI from BTG Pactual last
year helped it almost double in size, making it one of
Switzerland's 10 biggest private banks behind the likes of UBS
, Credit Suisse and Julius Baer.
However, the deal has been complicated by BSI's legal
troubles which included dealings with scandal-hit Malaysian
government fund 1Malaysia Development Bhd (1MDB) and resulted in
billions in client withdrawals.
This has meant EFG has taken on fewer assets than hoped for
when the deal was agreed, with the bank's assets under
management falling to 144.5 billion francs at the end of 2016
compared to the predicted total of around 170 billion francs.
EFG had already lowered the deal price in November to 1.06
billion francs from 1.3 billion when the deal was announced. In
full-year results on Wednesday it said it now expects the
purchase price to come in at 783.9 million francs
The bank cautioned this was "subject to BTG's expected
objection and, if necessary, verification by an independent
The lower price helped Zurich-based EFG post 2016 net profit
of 339.3 million francs, far ahead of the average estimate of
13.8 million in a Reuters survey of four analysts.
The bank said underlying net profit which excludes one-off
items was 82.3 million francs, down from 91.1 million in 2015.
BSI also suffered net outflows of 4.9 billion francs in
November and December 2016, resulting in total net withdrawals
in 2016 of 5.4 billion francs for EFG, the bank said.
"From our perspective, the outflows at BSI are surprisingly
large at CHF 4.9 billion during only two months of 2016," Helvea
analyst Tomasz Grzelak, who rates the stock "hold", wrote in a
Zurich-based EFG, whose largest shareholder is Greece's
Latsis family, proposed an unchanged dividend for 2016 of 0.25
francs per share, matching the median survey estimate.
"Our priority for the coming years is to fully realise the
potential of this transformational business combination for the
benefit of our clients, shareholders and employees," EFG Chief
Executive Joachim Straehle said in a statement.
($1 = 1.0080 Swiss francs)
(Reporting by Joshua Franklin; Editing by John Miller and