ODDO : Private banks expected to continue to grow
The three listed Swiss private banks, EFG International, Julius Baer and Vontobel, benefit from favourable operating momentum with sustained net inflows in private banking and an expected improvement in their cost/income ratio (-5.5 points in four years) and RoTE (+1.5 points in four years). Among them, we prefer Julius Baer (initiation on Outperform, target price CHF 68), for the turnaround in its profitability and the resumption of share buybacks as of next year. We are initiating coverage on EFG International with a Neutral rating (target price of € 19.3) and we remain Neutral on Vontobel (target price of CHF 66).Revenue growth driven by the increase in AuM
EFG International is a holding company, engaged in managing private banking and asset management group operating in around 30 locations worldwide. Co. provides private banking, wealth management and asset management services. Co. operates seven business segments: Americas, Asia, United Kingdom, Continental Europe, Switzerland, Investment & Wealth Solutions. Co.'s principal places of business are in Bahamas, Cayman, Channel Islands, Hong Kong, Liechtenstein, Luxembourg, Monaco, Singapore, Spain, Switzerland, Taiwan, the United Kingdom and the U.S.
Julius Baer is engaged in private banking activities primarily in Switzerland, Europe, Asia and South America. Co. focuses in private banking, which includes certain internal supporting functions which serve entirely the core business activities.
Vontobel Holding is a holding company. Through its subsidiaries, Co. is a traditional Swiss private banking group offering financial services to clients around the world. Co. is divided into three business divisions: Private Banking, Investment Banking, and Asset Management, as well as the Corporate Center (comprises Operations, Finance & Risk and Group Services). As of December 31, 2008 Co.'s total assets amounted to SFr15,531,800,000.
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
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