Good morning, ladies and gentlemen. A very warm welcome to the full year 2025 results presentation of EFG International. As usual, we are, we'll be presenting our results with speeches from the management team. We have today with us our CEO, Giorgio Pradelli, and obviously our CFO and Deputy CEO, Dimitris Politis. And after the presentations, we have enough time, obviously, for your questions. We will start with questions in the room first, and then move to potential questions from the call. Otherwise, as usual, I point out the disclaimer in the presentation, and without holding up further, I hand over to Giorgio. Thank you.
Thank you. Thank you, Jens, and good morning. Also, from my side, a warm welcome to everyone who is here in the room with us in Zurich, and to everyone who will follow the presentation via webcast. Today, I'm very pleased to be here with Dimitris to present to you the full year 2025 presentation. I think 2025 has been a very strong year for EFG, has been a year of strong process. The operating business is firing on all cylinders, and it has been basically a record year. We have been able to grow very strongly from organic growth. Today, or actually in few days, is 10 years from the acquisition of BSI, and we are very pleased that we have started a new series of acquisitions.
We have done three acquisitions in the last twelve months, and we were able to report the highest ever level of assets under management. We were able to translate this growth in record revenues, and we were able to, despite the fact that actually we had to mitigate declining interest rates and a weak dollar, that, as you know, they've been for us headwinds in 2025, and most probably will remain headwinds in 2026. But this record profitability, this record operating income was translated in record operating profitability, and also, we made a lot of progress in dealing with our legacy matters, and we delivered a record IFRS net profit, and we are in a position to propose a record dividend per share to our shareholders.
Let us now move to page 4, and just to give you some of the highlights of our results for 2025. As I said, it has been a year of strong organic growth, strong NNA, complemented by M&A. The NNA have been CHF 11.3 billion. This is 6.8% growth year-on-year, and this is actually the second highest level of NNA growth, the highest since the Global Financial Crisis, and I'm very pleased because we have had an acceleration in the fourth quarter. As I mentioned earlier, we were able to do three acquisitions in the last 12 months. Two acquisitions are already in the numbers. They amount to CHF 12 billion, and they basically are equivalent to one year NNA, if you wish.
As I mentioned earlier, our strong growth in terms of organic has been complemented by M&A, has been translated in the highest level ever of assets under management, CHF 185 billion. This growth has been translated in an impressive, I would say, operating performance, is almost 500 million, 493 million francs. This is 26% year-on-year, and, as I said, this strong operating growth has allowed us to absorb also dealing with some of the legacy matters that we know we have to, to de-risk. All in all, at the end, as you know, we had a positive element in the first half of the year, was CHF 45 million, due to an insurance recovery from a legacy matter that we closed in 2022.
In the second half, we had a provision of CHF 59 million for another litigation that dates back 15-20 years back. All in all, is CHF 14 million. We had also another legacy topic, is about insurance. Insurance, there is some volatility. Dimitris will go in more detail, but again, we have absorbed also this, volatile topics, and we are able to deliver CHF 325 million IFRS net profit, which is the highest in record. And this will allow us to deliver or to propose the highest dividend ever, CHF 0.65 per share. What I think is remarkable is that this is the fifth consecutive increase in our dividend, and this obviously shows how strong our operating profit is.
Moving to the next slide, on slide 6, we can see that 2025 has been a very strong year, but this also the conclusion of our last cycle, the cycle 2023 to 2025. What is remarkable here, we already discussed at length three months ago in this room during our Investors' Day, is that we were able to deliver a consistent, sustainable, and profitable growth over the last cycle, but also you can go back to 2019, and you see that this has been a continuous improvement of the operating performance. Now, with this, I would like to give the floor to Dimitris, our CFO and Deputy CEO.
Good morning from me, and thank you for attending the full year 2025 results presentation. I would like to start with, as usual, with the view of the performance of EFG over the cycle. Here, on page 8, you see the performance on the profits starting from 2019 up to 2025. It is fair to say that we are concluding this cycle, the 2023-2025 business cycle, which is the last one, with record profits. The profits are at CHF 325 million. We are also posting the highest ever EPS with 1.03 CHF per share, and our return on tangible equity is above 18%.
One element to highlight, you'll see on the top right, is the fact that in this business cycle, what was really marked as very positive performance has been revenue performance. In the last three years, we've managed to increase our revenues by 31%. In contrast, in the previous cycle, the growth was only 8%. So our strategy of building volume, building AUM, and defending or expanding the margin has been very successful through this cycle. At the same time, you'll see that efficiency has improved. Back in 2019, the cost-to-income ratio was about 84% or even higher. Now we are below 70%, and clearly, this has led to the expansion of EPS.
We started with 30 cents per share, now we are above CHF 1, which allows also what Giorgio mentioned, which is the 5th consecutive increase in dividend per share, in the last, in the last five years. Now, the next page is a bit more focusing simply on 2025, and these are the key highlights for, for this year. Clearly, our strong operating performance continues in 2025. Business development, 6.8% growth in net new assets. The revenue margin was at 98 basis points compared to 96 last year, and we hired or signed 79 CROs. I think what is very important is the figure at the bottom of the page. The AUM have now grown to CHF 185 billion, which is a very good starting point for this business cycle.
In terms of profitability, revenue growth was 11% in the year, or 8%, excluding the exceptionals. Cost-to-income ratio improved compared to last year. The cost-to-income that we post as a headline is 69.8%, and the bottom line profit, again, is at the record, CHF 325 million or CHF 339 million if we were to ex- to exclude the exceptionals. Finally, in terms of the soundness of the balance sheet, Core Tier 1 is at 14%. We had a fantastic capital generation of over 500 basis points during the course of the year. LCR is very strong at 270%, and the dividend is at CHF 0.65 per share.
Now, zooming a bit even closer to the last two months, because we gave you a trading update in November, which included ten-month results. If you look at the chart, what we mentioned in November is the first bar, which is about CHF 320 million in the first ten months. If you look at the performance in the last two months, we added more than CHF 60 million of bottom line in two months. The run rate of over CHF 30 million per month is the highest level in terms of run rates. So both in terms of profitability run rates and also in terms of revenue margin run rates, the figures are higher than what we communicated back in November of 2025. As Giorgio said, we also have two exceptionals in the year.
On a net basis, they create a drag of CHF 14 million net in the, in the P&L. If we were to exclude the exceptionals, our bottom-line number would have been CHF 339 million, which is a 6% increase year-over-year. In terms of other elements in the profitability, I would say that we also had limited contribution from life insurance, which brings me to the next page, page 11. This page is important because on this page, we try to strip out the noise and make sure that we give you a clear indication of how the core private banking business is evolving. What you see here in the chart is operating profit. It's simply revenues less costs, and we have indicated separately the contribution from life insurance.
What you will notice is that in 2025, the core private banking business delivered CHF 425 million of operating profit, which is an increase of 18% compared to the last year. This is the highest increase in core banking operating profit that we've seen in the last business cycle. What does that mean? That means that the investments that we made in the first part of this business cycle, and I remind you that they were, they were investments that had to do with hiring in 2023 and 2024, also investment in technology that were made in that period. So all these investments are now paying off, and we're seeing the impact in P&L of those investments which were made one or two years ago.
In terms of the metrics that you would follow in order to figure out whether these investments are going well or not, what I can report is that, and you see it also in the figures, is we've seen consistent, strong business development. The last two years, the NNA growth has been above the 4%-6% range that we actually communicated as our target. And also, what we've been managing to do is turning this growth into increased profits. In terms of how you do that, is clearly we need revenues, and the revenue margin to be resilient. I'll come back to that later.
You also need cost discipline, and also come back to that later with specific pages on it, because we've also seen that on the cost side, our saving targets have been exceeding the initial targets that we have communicated. Just to note that, as you know, we have concluded 2 acquisitions in 2025. These acquisitions had a small negative impact in P&L in 2025, simply because their acquisition costs were higher, and they were only included in the P&L for a couple of months. Finally, life insurance or the contribution from life insurance has been a lot more muted in 2025. This comes because we have also de-risked our position. As you know, we have taken action already in previous years, but also in 2025 to reduce our exposure.
We also expect that going forward, the contribution from life insurance is gonna be a lot lower than it used to be in previous years. The next two pages are the summary of the financials, so I'll skip those two. I'll go to page 14. Page 14 is the usual set of numbers that matches our financial targets. These are the financial targets for 2023-2025. As mentioned earlier, we had a 4%-6% growth range for NNA. We've been beating that the last couple of years. The revenue margin has been very resilient against our target of 85 basis points. The cost-to-income ratio has been consistently coming down.
The target was 69%, and the return on tangible equity in the last three years now has been above the 15%-18% target that we have set ourselves back in 2022. Finally, in terms of the targets, and this is probably the last time that you'll be seeing this page on this presentation. This is the conclusion of the 2023-2025. You will see that the performance against the targets has been very strong. I think one element that we also communicated was that we were targeting a 15% growth in profits on average during the period, every year. The actual delivery has been 19%.
So in terms of bottom line, which is clearly what we're aiming for, we have been doing better than what we have promised. Now, going a bit more into the growth on page 16. The growth in AUM is 12%, so we went from CHF 165.5 billion to CHF 185 billion in 2025. More importantly, the net new asset growth was CHF 11.3 billion with pretty much all cylinders firing at very good rates, which is on the next page. Eleven point three billion is the highest nominal amount of NNA that we've had at EFG since the Great Financial Crisis. So in the last 15 years or almost 20 years now, this is the highest NNA of 11.3 that we have published. Markets were favorable.
As we all know, currencies were completely against us, with the dollar weakening significantly. We also added CHF 11.7 billion coming from two acquisitions, Cité Gestion and ISG. In January 2026, we also announced a third one, the acquisition of Quilvest, which will add another CHF 4 billion once it is concluded. What really pleases me is the figures on the right. We've had a couple of periods where new CROs have been, call it, the sole almost contributors to NNA growth. In 2025, we've seen a reversal to a composition which looks more like what we've seen in previous years. Before 2023, about 65% of our NNA is coming from new CROs, and about 35% of NNA is coming from existing CROs.
In terms of the geographical split of the business development, this is on the next page, page 17. You'll see that every single region is posting growths, a growth which is above 4%, so every single region is at least within the 4%-6%, and we have two, with Asia-Pacific and the Americas, which are above the six percent growth range. So in reality, we have overall, it's a very good performance. It's all the regions fighting at very good levels, and this is a testament to our diversified business model in terms of how deliver growth. We have also delivered growth by hiring CROs, and this is on the next page, on page 18. Our number, total number of CROs at the end of 2025 was 763.
This comes with 238 CROs in Shaw and Partners in Australia, and we also have 67 new CROs that joined through acquisitions in 2025. If you see in the middle, our hiring patterns, clearly in 2023, the numbers were very high, and this came from a dislocation with Credit Suisse UBS. Although we just hired about a quarter of the people in that year from Credit Suisse, all the rest came from about 20 other banks. The numbers have gone down in 2024 and 2025. They are reverting pretty much to the levels that we have set out as our target. Gross hiring numbers of 50-70 CROs.
So in 2025, we actually hired 51 CROs, and we also extended offers to sign to another 28 for a total of 79 CROs that have been hired or have been signed to hire. In terms of the AUM to CRO, this is on the right-hand side. Why is this important? This is important because it's a very good measure of efficiency, and the more you can have a higher AUM per CRO, the more efficient we become. As you see, we've been growing throughout the years. On a like-for-like basis, we were at CHF 363 million per CRO at the end of 2025. If you were to include the acquisitions, you are at CHF 342 million, simply because the acquisitions come with smaller size CROs, given the nature.
At the same time, one of the reasons that we've managed to increase this is that we've been effective in performance managing our CROs, and you see that both on the load and also on the number of CROs. Now, moving a bit more to the P&L. As I mentioned earlier, we have a very specific strategy, which is about building scale, and it's also about defending or even expanding our margin. What does that mean? Well, what is the result of that? That means that our top line has been growing, has been growing significantly throughout the last three years, but also our revenue mix is becoming of a higher quality. If you look at what has happened in 2025, you'll notice that our commission income, which is our bread and butter, this is the highest quality revenue that we have.
Our commission income grew by 70%, and this is on the back of, firstly, AUMs expanding, but also us gaining three percentage points year-on-year on the commission margin. So we've been managing to expanding the margin on top of growing the volume. On the other hand, we've discussed many times that, interest income or interest-related income, can be a source, a source of vulnerability because the rates have been going down. Actually, what we see in 2025 is that in the second half of 2025, interest-related income is marginally up compared to the first half, which probably means that we have reached close to the bottom of that phase of absorbing rate drops, throughout, the last couple of years. At the same time, we've seen a lot of client activity in currencies and metals.
Of course, this is linked to the increased volatility, both in currencies and metals in the last couple of years, and this has helped net other income. And clearly, we've had a more limited contribution from life insurance in the net other income as well. In terms of going back to our strategy of how we intend to grow going forward, clearly, we will have to defend margin. I'll come back to why we believe that our margin is resilient on the next page. But one thing to note is that in terms of the growth element, so the AUM, the starting point in 2026 is CHF 185 billion of AUM. The average AUM in 2025 were CHF 170 billion.
So we have a 10% head start in nominal AUM as we start the year in 2026. Next page, page 20. It's about resilient revenue margin. You will see that the revenue margin that we've have in the second half of the year is at 93 basis points. When we had the Investor Day in November of last year, that figure was 92 basis points. So we have actually seen an expansion of the revenue margin in the last two months of the year. In terms of our expectations going forward, look, the two key topics are interest rates and also, can we continue expanding commission margin? On the interest rates, you see the sensitivity that we show on the top right.
The sensitivity is CHF 36 million of drop in revenues if all four major currencies lose 100 basis points in the rates. Clearly, that scenario is not realistic, at least for 2026, given the information that, that we have. Our expectation is that the sensitivity to interest rates is now a lot more muted. Maybe we lose a basis point in 2026, but clearly, it is marginal compared to our overall level of 93 basis points of revenue margin, which is way ahead of the 85 basis points, which is the average for the last 10 years. At the bottom, you'll also see the facts, and the efforts we have been making to expand our commission margin. Firstly, you see mandate penetration. It has reached 67% at the end of the year.
This is against our target of 65-70 that we had for this business cycle. Also, you'll see that the breakdown between recurring commissions and non-recurring commissions is also moving in the right direction, and we have now a 46 basis point commission margin for the full year 2025. Moving on to costs on page 21. You'll see that we have operating expenses up 6%. This is the nominal growth. This growth also masks the fact that we've done two acquisitions. These two acquisitions account for about 2.5% of that growth. If you were to strip that out, the real growth is 3.7%. What is more important is that the FTEs, in comparable terms, have been going down.
So we closed the year 2024 with 3,114. On a like-for-like basis, the year 2025 closed at 3,037, so we are about 80 FTEs down. Clearly, we have added more because we've done two acquisitions, and the salary costs have been going down at the same time. There is growth in the personnel side, because of variable compensation, and this is something that is expected. Actually, like, in my view, the only cost that I can accept going up is variable compensation because it means that we're making probably five times that revenue, when it comes to, to revenues. So the operating leverage is very high.
We had stable other expenses, so general and admin expenses were pretty much flat, compared to last year, and we still carry some legal and litigation fees. Now, moving to the next page, which is 2022. This is a page on how we think about cost management, and several people in the room or on the phone call this self-help. We call it finding or creating room so that we can grow our business.
You'll see that because if you look at the chart, in terms of the last bar of the chart, where it's under Cost Management Actions, you'll see that again, in 2025, we've managed to reduce our cost by about 3% during the course of the year, and that created exactly the room to invest in hiring and other investments, which is the first bar in that chart. Actually, you know, even the numbers are like the investment is CHF 36 million, and the cost saving is CHF 38 million. So that matches very well in terms of our strategy in cost and efficiency management. The only two reasons costs have gone up are variable compensation, the CHF 28 million that you see in the second part, the second bar, and the fourth bar, it's also the costs that come from the acquisition of Cité Gestion and ISG.
Furthermore, at the bottom right, you'll see that, as also communicated in November, we have exceeded our efficiency and cost management targets under the Simplicity Project. The initial target was 40. That target was upped to 60, and the actual conclusion is 66. There have been a number of actions included in this program. It's about rationalization, it's about automation, it's about reviewing processes end to end, and, like, we already have a new program which is running for the 2026-2028 cycle with a scope of CHF 70-80 million of efficiency and cost savings. Moving on to the balance sheet. In terms of the balance sheet on the left, no big movements. We still have about CHF 18 billion or more than CHF 18 billion of very liquid assets on the balance sheet.
Core capital ratio, CET1 capital ratio at 14%, total capital ratio, 17.3%. The loan to deposit ratio is at 58%, and both liquidity ratios are at very good levels, at where they were last year or even better. Finally, we bought CHF 11.8 million of treasury shares throughout 2025, and there is a new action on the buyback. The board decided that the buyback continues in 2026 and 2027, for a total of up to 9 million shares to be acquired until July 2027. In terms of the impact from acquisitions, the acquisitions cost 130 basis points on the core Tier 1 ratio.
Now, as Giorgio mentioned, clearly our primary focus is on expanding the core business. At the same time, we need to make sure that we successfully de-risk the balance sheet from the legacy positions, that come from, pretty much 20 years ago. On the left-hand side, you see the actions that we have taken on the life insurance space. We've been active, quite active in 2025. 2 major actions, one was to dispose of the entire synthetic portfolio, and the second one was to unload about a quarter of our physical holdings in life insurance policies. I'm very pleased to say that the carrying value of that portfolio now is about, 260 million, as at the end of 2025.
It was CHF 360 million at the end of 2024, and it was over CHF 500 million when we started this business cycle. So there's been continuous de-risking, and the numbers are going down. Hence, I expect some volatility coming from it, but overall, I don't expect big numbers to be coming through the P&L going forward. On the right-hand side, we have the legacy litigation cases. Some are in the life insurance space. We've resolved three there. There's one more pending, probably end of 2026 or early 2027. And then you have the two exceptionals that also Giorgio described earlier. The positive one is the first one, which is the recovery from an insurance on an old matter. And the second one is the provision on a litigation case, which we took in December.
On a combined basis, these two created a CHF 14 million drag on our reported P&L. In terms of capital, which is on the next page, page 25, we had one of the strongest capital generations in the last few years. In terms of gross levels, we were over 5 percentage points of capital generation. On a net basis, after risk-weighted assets and dividends, the net capital generation was 1.6% for the 12 months. This is part of the capital light model, and we do expect that we'll be running at very strong organic capital generation going forward. What you see after that is the buyback, which, combined with the dividend, enhances the returns that we offer to our shareholder.
And then, quite a few one-off items, so the acquisitions cost 130 basis points. The provision for the litigation case was 100, and we have two currency impacts. One is, call it, the normal currency, and then, the second one refers simply to the Tier 1 instrument that we hold. The reason we show it separately is that if we decide to call that instrument, that will come back. So although you see that the core Tier 1 ratio that we report at year-end is at 14%, effectively, if we were to call that instrument, it would have been 14.4% after we unwind. With 14% or 14.4%, we are clearly very comfortably within our 12%-15% capital ratio that we communicated back in November.
And with the combination of the strong capital generation, we look forward to discussing even more M&A activity if it fits the plans and conditions that, that we hold. Which brings me nicely to Quilvest. This is the last M&A that we announced back in January. You see some of the figures here. I will not spend too much time on it. The only thing I'd like to say is that it looks small. It's CHF 4 billion AUM, but the beauty of Quilvest is the very high quality of its clients, and given the fact that it has been a small bank for many years, we believe that we can expand dramatically the offering to these clients.
So, it is an acquisition where we are looking to make sure that one plus one makes three and make sure that we create value for all the stakeholders. And to close this on page 27, I think that, you know, we are at the juncture where we are officially closing 2023-2025, and we are officially opening 2026-2028. We are definitely closing 2025 on a very high note. Record growth, record profitability, record momentum in the profitability that we are posting. So, I think we have all the ingredients to feel very comfortable about the next cycle. The priorities for 2026, you know, unfortunately, in our business, just remain pretty much the same. It's not that we're changing priorities.
So it's gonna be about business development, it's gonna be about making sure that we maintain the high growth in the top line, preserve margin, and at the same time, that we maintain our cost discipline while we're doing all these things. And, the last part is, clearly, we did two acquisitions in, 2025, now we need to make sure we put them to work. These acquisitions, as I said earlier, had a negative impact in 2025. They have already started having a positive impact in 2026, but, it's a matter of making sure that we exploit our investments to their full potential to make sure that we further expand profitability in 2026 and beyond.
In terms of the next cycle, these are the financial targets that you see on the right, and just to repeat, 4%-6% growth in terms of net new assets, revenue margin in excess of 85 basis points, cost-to-income ratio of 68%, and a return of tangible equity of 20%. On that note, I'd like to thank you very much, and I pass it back to Giorgio for priorities and outlook. Thank you.
Thank you. Thank you, Dimitris, and let us now focus on the outlook, what we can see for 2026 and beyond, and what are our priorities for 2026 to 2028. Now, I would like to start with this page. This is. You have seen this page during Investor Day. This is our strategic framework, and three months ago, we basically said that we want to continue to build on our strength. We want to continue to focus on our clients. When I think about clients, I always think about net new assets, because if we do a good job with our clients, we can increase the share of wallet, and we can attract new clients.
Obviously, we want to deliver the best possible content to our clients in order to increase the level of engagement and ultimately the level of margin and operating income. And finally, we need to translate all this into a growing profitability via simplicity and operating leverage. At the same time, we have identified three areas, three new areas for growth, opportunities of growth, and we spoke about branding and client experience, we spoke about commercial excellence, and we spoke about tech-enabled services and processes when we introduced the concept of the augmented CROs. Again, it's early days. We just started a new cycle, and only three months passed from the Investors Day, but we believe that we have done already quite good progress in all these three areas, and we would like to give you a quick update. First of all, about branding.
We stated in November 2025 that brand is important for us, is important for our clients, and we wanted to strengthen our brand. Our ambition was to become or is to become one of the top 3 Swiss private banking brands by 2028, and in terms of Brand Finance, to have a ranking among the top 250 brands globally. We are very pleased because the Brand Finance report will come out at the beginning of March, I think the fourth of March, but we are allowed to present a preview of our results, and we are very pleased because the brand value has increased in excess of 50% to CHF 629 million.
What is also very important, we have gained more than 50 places, 50 positions, and we are now 262 in the ranking, which is obviously very close to the 250 that was our original objective for 2028. So I think this progress reflects our investments in an enhanced client experience and a higher brand recognition across markets where we invested quite a lot in the last few years. Now, the second area is about the technology and is about launching the augmented CRO.
Obviously, these days, I'm very pleased that we brought this concept three months ago because, as you know, these days, everybody talks about AI, basically substituting asset managers, and in the U.S., there was also the debate whether AI will substitute players like Charles Schwab and others. We always said, and we said it three months ago, and we continue to believe that, is that AI and technology and the human factor are complementary, and obviously, we believe that our client relationship officers are among the best in the industry, but we believe that we can improve further if we are able to give them not only great teams around them in the areas of investment solutions, wealth solutions, credit solutions, and global markets, but also the best possible digital solutions.
We have announced three months ago that we have started a cooperation with BlackRock for the Aladdin system. We are pleased to report now that this has been rolled out in Switzerland, which is our biggest region, and our client relationship officers are very pleased. We have also launched the CRO Atlas, which is basically a tool that allows the CRO to have clear insights about their clients, the portfolio, the businesses, and we expect an increased ability for our client relationship officer to increase the share of wallet and the client engagement. And again, we started to do our first steps regarding AI. We have rolled out Ally, which is our in-house AI platform, to all the new locations, and we have seen that the adoption has been incredible, which obviously shows how people are interested in these tools.
So we continue to go forward in this direction. It's a journey, but again, the progress in the first three months is very encouraging, and the new CEO team is again very committed to make us one of the best firms also in this area. The third point is about commercial excellence, and we start seeing some improvements in terms of client engagement and share of wallet. Dimitris already mentioned that our existing CROs are improving in terms of gathering assets, which is obviously a function of attracting new clients, but also a function of improving the share of wallet. And as I mentioned earlier, content for us is very, very important. Obviously, we have great teams in our investment and wealth solutions that provide solutions to our clients.
But clearly, it is also important to create an ecosystem with top players in the market, and we have announced yesterday a cooperation, a partnership with Capital Group, one of the biggest active asset manager in the world. We have been cooperating already for a long time, but we have decided to deepen our partnership, and I think this is a mean in a way to further enhance our personalized offering and impartial advice to our clients, which ultimately will support basically our business. Now, three months ago, at the end of November, we presented to you our operating model. Our operating model continues to deliver. In essence, we continue to focus on growth, translating both organic and via acquisition. We translate this growth in growing profitability.
We use part of the profitability that we generate in investing in order to transform the bank for the better, and this generates attractive returns. As you have seen, in 2025, we were able to deliver very attractive returns to our shareholders indeed. Now, looking at 2026, I must say that the year started as 2025 ended. This situation where there is a lot of volatility and uncertainty driven from geopolitics to financial markets, and we can debate for hours about the situation.
But this volatility, coupled with the attitude of our investors, which is actually quite risk-on, is quite constructive and positive for our clients because we see that the level of engagement and the level of transactions that our clients are doing with our CROs and with our dealing floors is at very high level, and we expect this to continue as long as the overall attitude is risk-on. If we are gonna have another risk-off situation like in April last year, then we will have to see and obviously react. But for the time being, the year started very, very well, and for us, the priorities, as Dimitris said, do not change quarter after quarter, but I would like to emphasize them again.
Number one is obviously about maintaining our growth momentum, so net new assets and client engagement remains our top priority. Second, after NNA, we have now M&A. M&A is important. As mentioned already, we have done three acquisitions in the last 12 months. This is CHF 16 billion, not dollars. I think maybe earlier I mentioned dollars. No, no, we continue to report in Swiss francs. And obviously it is important that these acquisitions start basically being integrated and start delivering in terms of profit contribution starting in 2026. The third priority after NNA and M&A remains to defend our margin. Margin resilience is very very important.
And again, we have managed very well, I believe, in 2025, to mitigate the headwinds in terms of declining interest rates and a weaker U.S. dollar. As Dimitris says, I think that by now, the declining interest rate is, you know, is like when you sail, the wind is becoming softer, so it's not really an issue anymore. I think we will be able to absorb the one basis point that Dimitris has indicated. The weaker dollar, this is a bit more complicated, because as we see these days, it's very difficult to predict the direction. I think there was, at the end of the year and beginning of this year, some wishful thinking by many market participants that we could see a rebound.
We have not seen that yet, and so we will have to continue to focus on what we can control, and what we can control is for sure the net commission income and all the advisory activity in terms of investment solutions, wealth solutions, credit solutions, and global markets. Next priority remains obviously to generate operating leverage. We discussed three months ago about the golden rule, to try to grow revenues at a double rate of costs. Last year, depending on how you look at it, we were very, very close to that. I think we will continue this year, and technology for sure will allow us to improve productivity and efficiency. And finally, we are obviously very committed to deliver for 2026, and we are very confident to meet the 2028 financial targets.
Now, we are entering a new cycle, we are closing, I think, today—well, we have still the general assembly in a month, but, after that, we will close the 2023/2025 cycle, once and for all. But, again, it has been a fantastic ride, and we are starting the new cycle in a position of strength. And so all the initiatives, just to be very clear, all the initiatives that I was mentioning before at the end of the day, are geared in ensuring that we deliver a consistent performance and we unlock the power of compounding, as you can see on the right-hand side of slide 34.
Our objective at the end of the day is to generate double-digit net profit growth at around 15% and to achieve a return on tangible equity of 20%. In closing, and looking ahead, first of all, I would like to mention that our aspiration, our vision, is to be the private bank of choice for generation of clients. I think that the momentum of the last years shows that we are already, for many clients, the private banking of choice for generational clients. Obviously, we want to become for a bigger number of clients and to be really recognized for delivering truly personalized service and impartial advice.
To close, I would like to say that 2025 has shown that we are closing the cycle with a strong momentum, and as I said, we were able to translate this in record profit and very attractive returns for our shareholders. We also made three acquisitions in our key markets in the last 12 months, and this, in my view, is important to be emphasized how we can successfully complement organic growth with strategic M&A acquisitions. So overall, our business model is not only, I would say, resilient, but is also geared towards profitable and sustainable growth, and this is the case today and will remain the case in the next cycle.
Obviously, as a management team and all our teams at EFG that I thank here for the commitment and dedication to EFG, are fully focused on the execution of the budget, first of all, for 2026 and the 2028 strategic plan, and clearly, we are very confident to deliver value for all our shareholders. And, with this, I thank you for your attention. I close here the formal presentation and hand over back to Jens to open the Q&A session. Jens, the floor is yours.
Thank you, Giorgio. Thank you, Dimitris, for your presentations. As just said, we started the Q&A session in the room, so if we have a question, please, let's start with Mate over there. So first question.
Good morning. Mate Nemes from UBS. Thank you for the presentation. I have a couple of questions. The first one would be on your comments that run rates in a number of areas were better versus what you expected at the time of the CMD that relates to the last two months of the year. Could you talk about what surprised positively? What are the areas that perhaps you are more positive about versus the November CMD? That's the first question. The next one would be on the litigation provision that you booked in December. Could you share more details around this? What led to this provision? What triggered this, and how do you see the case unfold from here? And the last question would be on capital and the FX impact specifically.
Can you talk about your capital hedging approach? Does the 60 basis point negative impact mean that you're not applying FX hedges, and there's a considerable mismatch between CET1 capital and RWA? Thank you.
Let me start with the run rates. I think there are two points on the run rate. One is the actual bottom, bottom line, and we try to show this on page... Hold on a second. This is on page 9 of the presentation, where you see that, you know, in the period between July and October 2025, we actually had CHF 100 million for those four months, and then that number went close to CHF 165 million for the six months. Clearly, the last two months have been very strong in terms of profit generation. This is, for us, very positive, and as Giorgio said, we also see continued strength in the delivery of the profits also in the month of January of 2026.
Now, the second point is on the revenue margin, which is described on page 19 of the presentation. For the second half of the year, we were at 93 basis points. Back in November, we reported that for the 10 months, or for the four months, which were the last four months at the time, we were at 92. So there we also see an uptick, which makes us feel,
more positive. In terms of why things are, are better than what we're expecting, there are three reasons. One is the mandate penetration effort continues, and we see that translating into commission income and commission margin. The second one is that we had good client activity the last two months and in January of 2026. And the third one is the pressure on interest-related income seems to be coming down. So a combination of all three is what helps us feel more comfortable and more confident that, okay, maybe we do not stay at 93 going forward. It is certain that we'll have some erosion from the 93, but the starting point is a very solid starting point, from which to work on.
And clearly, as you mentioned, the fact that our AUM is now 10% higher than the average of previous year is another element-
Yep.
- of support to our business.
Yep. Now, the second question was about the litigation, and bear with me because there is, I am somewhat limited in terms of the information I can disclose on that, as you can understand. Just to remind everybody, this is a legacy litigation. It pertains to events that happened approximately 20 years ago, and it was first disclosed in the financial statements back in 2019, in the contingent liability section. It is a complicated case. It is a case which is now the trial is happening in London, in the U.K. The plaintiff is PIFSS which is the Kuwait State Pension Fund, and we have about 30 defendants in that case, including EFG and some other banks.
Now, in terms more specifically about where we are in the case, the court proceedings, the court hearings started in March 2025, and they are still running, so we are in month 11 of court hearings. We do expect that the court hearing will last probably another couple of months, and we expect the verdict to come out in around the summer of 2026. Clearly, we continue to defend the case. We have very strong defenses, and we'll continue arguing our case over the next two months still.
But given the fact that we've gone through 11 months of trial, means that we have gathered more information about the possible outcomes of the case, and we have now reached the stage where, under the IFRS accounting rules, we can reliably estimate, and this is the reason why we posted, we recorded this provision in our P&L and in our balance sheet in December 2025. Again, timing-wise, a verdict is expected at somewhere around summer of this year. And Mate, you had a question about capital, the capital impact, and the currency. The way we work on currencies is that we try to match the composition of our equity with our composition of risk-weighted assets, which is a bit of a natural hedge, if you wish.
Which means that if currencies are moving one way, then I would expect... If you have an adverse effect in your equity, I expect that you get a positive effect in your risk-weighted assets, and you try to match the two. You're not managing the equity as a number, you're not managing risk-weighted assets as a number, you're managing Core Tier One ratio as a number. This is how we think of it, but clearly, we disclose the movement in this, the currency translation adjustment here, because in 2025, it's a more significant number. On the other element, which pertains to the Tier One, it's a bit of a, it's a bit of an odd way that IFRS deals with it.
Although the impact is only on the Tier 1 instrument, you cannot change that, the holding value of that instrument, you need to impact Core Tier 1. That's the reason we're saying that if it gets called, that 40 basis points get released. So our effective Core Tier One ratio is now 14.4%, the way we think about it. Sorry for the detailed explanation.
Great. Then we have the next question, please.
Hello, this is Daniel Regli from ZKB. I have two follow-up questions. One is on the gross margins and the development there. Particularly obviously in H2, we saw a kind of an uptick in the recurring commission margin. If you can just maybe reiterate a bit your explanations there and in how far this is sustainable into the next years. And then secondly, obviously, again, on the net interest margin or the margin outlook on interest income, just maybe help me understand a bit more how you exactly come to, let's say, one basis point pressure. What do you do? I think markets still expect some rate cuts in US-
Yep
dollars as well. And then lastly, on the net new assets development, obviously, congratulations to the strong net new assets development, particularly Asia Pacific and Americas, but obviously also in continental Europe. Can you maybe elaborate a bit more, what drove these strong asset flows? And maybe also explain a bit what extent was driven by maybe some re-leveraging, particularly in Asia. Thank you.
Let me start with the margin questions. I'll start with the interest margin, or interest-related margin, and I'll point you to page 19 of the presentation. On page 19 of the presentation, we show the sensitivity to rates, and what you see at the top right part of the page is that if we lose 100 basis points on all four key currencies, the net impact for us is a reduction in revenue by CHF 36 million. Clearly, the majority is coming from the US dollar. Clearly, we don't expect that all four currencies will lose 100 basis points in 2026. By the way, CHF 36 million is 2 basis points. We don't expect to lose on all currencies, and even on the US dollar, maybe the four cuts is a bit too aggressive.
So we estimate that, roughly speaking, it's not gonna be a two basis point hit, but a one basis point hit in terms of the interest-related margin in 2026. Now, to your other question about commission margin, you know, the two reasons why the commission margin has increased is mandate penetration, which you see at the bottom right, going to 67%, and the second part is client activity. And, so, you know, we are – we have an even higher target for mandate penetration for the next business cycle, so the one that we currently just started, 2026-2028, and we see client activity continuing.
Now, again, if client activity pulls back, then, especially in the non-recurring side, you will see a drop, while the recurring side should, should be a lot more resilient going forward. Giorgio, if you want to take the growth.
Yeah. In terms of NNA, as you know, first of all, this has been our fourteenth consecutive semester of NNA growth, so basically, this is seven, seven consecutive years. And, and clearly, you know, we have a methodology and a focus on growing our business, which goes beyond 2025, and will continue in the next cycle. As you have seen, on page 16, I think that what is remarkable is that the growth is being basically very strong across regions. If you see, basically all the regions are within our targets. Even more mature markets like Switzerland and the U.K. are within, are within our margin. It is a combination, as Dimitris was saying, between new CROs, but also existing CROs. The existing CROs have improved their performance.
It is correct what you say, in the sense that we did not have, like in previous years, de-leveraging. We have seen back leveraging coming in. Obviously, we believe that the fact that interest rates are coming down at the short end, and the curve is steepening, this allows clients to play the carry trade, and obviously, they engage much more in terms of Lombard lending. But, and this is on page 40 and 41, if you look at our dynamics, basically. You know, our total NNA has been CHF 11.3 billion. The increase in lending is CHF 1.5 billion.
This is about 13% of the total AUM, and if you go to the following page, on page 41, you see that at the level of the stock. If you can go on page 41, please. You see that the level of the stock is 11%. So the growth in lending is clearly, you know, 13% of the total NNA and is in line with our normal lending penetration. So I would say, yes, we are pleased that the de-leveraging has stopped, but our growth is not lending-led. Asia has been just to make the points of Asia and the Americas, obviously, Asia Pacific is in excess of our margin, 8.5%. And, you know, we have had growth also in terms of hiring CROs.
They've been all very successful, and they're doing extremely well, and the Americas also there has been, you know, a growth in all the areas. You know, we have opened in Panama, we have focused on Brazil, so it has been across the region.
Great. Do we have another question in the room at this stage? Then I think, the gentleman there, please.
Finance und Wirtschaft. You see the strong negative reaction on the stock market today with -9% due to your litigation case in the U.K. You had 36% of growth in the net benefit in the first half year, 2025. Now, you announced only 1% of growth. Why the benefits slowed down so much?
You spoke about the litigation case in the U.K., which cost you CHF 60 million, but combined with the other positive litigation case, this new Korea, it only was CHF 14 million. Are there other reasons for the slowing down of the net benefit? Why did you communicate only now and not in December about this litigation case? Second question about the U.S. dollar exposure in your assets. I think you have 60% of exposure in assets. Is there any trend at your clients that they want to reduce that U.S. dollar exposure due to geopolitical reasons? Thank you.
Maybe I can start on the stock price. And it's the first time I hear how the stock is doing because we have, the three of us, a pact that before going to the presentation, we never look at the stock price. So I was not aware. But let me tell you that our job is to manage the operating business of the company, and we have been told very young not to focus on the stock price, and if the operating company, the operating performance of the company works very well, then the stock price will follow. I cannot comment... I will not comment about today's stock price. Clearly, you know, as you said, the overall drag for the exceptional is CHF 14 million.
It is unfortunate that the positive was in the first half and the negative in the second half, but these are one-offs and have no impact, as we discussed, on the operating performance of the company. You wanna mention about the timing?
Well, the timing comes with the ability to reliably estimate, and that ability and the full estimate came very recently. So the appropriate timing to release that was with the full year results today.
Maybe the other element why, you know, this exceptional was CHF 14 million, and the fact that the net profit, if you look, I think that the question was about the difference between the operating profit and the net profit, is also due to the volatility of-
Yes
- life insurance.
Of life insurance, yeah.
That it was mentioned on page 10, I think.
Page 10.
Go to page 10. You can see here the difference in terms of performance of the life insurance, that in 2024 was quite strong at CHF 32 million, and obviously in 2025 was, was positive, but much less strong. And clearly, again, here, these are legacy methods. We cannot influence them directly with management actions. So the combination of the drag due to the exceptionals and the fact that life insurance was lower than the previous year, this is one of the explanations. Otherwise, the operating profit, as we said, is at record level, almost at CHF 500 million.
The second question with the U.S. dollar.
US dollar. The question on the US dollar: look, we, we see some clients that are moving away from the US dollar, so we see some clients that now are also considering other currencies. If you look at the composition of our AUM, which is at the back of the presentation, clearly this has not moved substantially. I'm trying to get the page.
Page 41.
Page 41. So, like, the US dollar was 47% last year. It's still 47% of the currency this year. So it is more anecdotal than actually us seeing a significant trend in terms of the currencies that our clients wish to use.
Okay, if we have no follow-up, then we move to the question on the phone, please.
The first question from the phone comes from the line of Hannah Leivdal from Citi. Please go ahead.
Good day, and thanks for taking my questions. I have two, please, if I may. So the first one is on the balance sheet and capital position is strong, but equally, your annual report outlines a number of legal cases outstanding. So what gives you confidence that you won't have to take more provisions for those, and how do you think about the amount of capital you're keeping aside feeding into this versus what is available for M&A and other growth initiatives? And my second question is on the-
Sorry for interrupting.
Sorry, pause.
We have a hard time-
No, it's all right.
Hard time understanding you. Maybe can you move your microphone a bit?
Now, is that better?
No, that's worse.
That is worse. How about now? Is this any better, or this is worse?
A bit, yeah, better.
For sure. A bit better?
Yeah, let's try.
I'll try. I'll try again, and then interrupt me. So I was asking on the balance sheet and capital position being very strong, but equally, your annual report outlines a number of legal cases outstanding. So I was wanting to ask, what gives you confidence that you won't have to take more provisions for those? And how do you think about the amount of capital you're keeping assigned heading into this, versus what is available for M&A and other growth initiatives?
Okay, I think.
Thank you very much. So I think I heard the question, so I'll try to answer to the best that I can. So the, as you say, our current CET1 position is 14% effectively 14.4%. And I guide you to page 24 of the presentation, because through the latest provision that we took, we have de-risked the largest single risk item we had in our on our balance sheet. It was the, it is the largest contingent liability that we actually have on the balance sheet. So in terms of risk profile, now I believe that we are a lot sounder than we were before.
At 4.4% of core Tier 1, we have about CHF 260 million of excess capital from our own management floor of 12%. And even more importantly, I would guide you to the capital generation that we have every year. So this year it was over 5 percentage points of gross and 1.6% on net capital, which is the result of a capital-like model, clearly, for a private bank like us. So I think that given where we are, we are very comfortable with our capital position. We are generating capital, which we can use for new acquisitions, and we do have also a capital buffer of CHF 260 million, which we can also use for other acquisition if we wish to do so.
By the way, if you want to discuss acquisitions, it is not that the acquisitions are simply done in cash. There's always, or usually there is a, there is a share element included in the acquisitions that gives us even more firepower. Hopefully, I've answered the question because I could not hear you very, very well.
Yes, that's very clear. Thank you. I have another one, but I don't know if you can hear me.
That's good.
Is it any better?
It's good.
Okay. Yes, so on the treasury swap margin, I just want to ask, why did this increase in the second half despite narrowing spreads versus Swiss rates? And what was the swap volume at end 2025, please?
The reason that the treasury swap activities, the revenues from that increased in the second half is because the volume of our swaps increased. As you say, as you rightly say, maybe the margin between the two currencies has not moved that much or even has narrowed a bit in the period, but it was through higher volumes of currency swaps that increased. And clearly, what also happened is that the NII element decreased because it's the other side of the same equation.
That's very clear. Thank you very much.
Thank you for your question. I think we have another question on the phone. Can we get that one, please?
Next question from the phone comes from the line of Andreas Venditti from Vontobel. Please go ahead.
Yes, thank you. I hope you can hear me better than my colleague just now. I know you mentioned the negative profit-
We can't understand you. That is even worse than before.
Can we try to get the sound regulated or try again?
Can you hear me?
No, not really.
Okay, never mind. I'll come back to you, Jens. Thank you.
Now it's good. Now it's better, so...
It's better? Okay.
Yeah.
I don't move, so I hope it's better. So thanks a lot. On M&A, you mentioned a negative impact on profits from the two small acquisitions. I guess it's a small number, but still, to ask on this, can you maybe quantify this negative impact, I guess, on the cost side, mainly, from this, on 2025 numbers? Thank you.
As you expect, Andreas, the overall contribution is a small single-digit negative number. The reason it is negative is that we included the profits of Cité Gestion for a few months, like Cité Gestion was two, three months. We had some acquisition costs, which are the one-off part of doing M&A, and the balance of those two was negative. Clearly, both companies were profitable, with actually profits growing significantly compared to the last year in 2025. It's just the timing of the acquisition and the amount of the M&A related one-off costs that get us to this small negative result in 2025.
Okay, does that answer the question? Do you have another one, or it's good? I think we lost him. Is there another, another question in the room, or?
Not at this moment.
Mate.
Ah, Mate has another follow-up. Okay, let's take that one.
Thank you. Yes, just one question. I wanted to ask you about the Ally AI platform, that you rolled out in 2025. Could you talk about the capabilities and the exact use cases of that platform?
Yeah, thank you. I think, there are several use cases that we're using, in particular in the investment solutions area. Then there is the general, let's say, use cases that you have with a normal, ChatGPT like, chat box. And clearly, the areas where we are trying to develop much more is everything related to, compliance and, and risk. I always been saying that RegTech for us is more important at times than FinTech, but these are the key areas where we, we are, we are expanding. And, the, the next level, but, we are not there yet, will be how to improve the, client experience, because all the use cases I mentioned were more about efficiency, on the backstage. And that will be the next, the next area where we're gonna focus on.
Okay, I think there's no further questions on the phone. If there's nothing in the room, then I hand that back to Giorgio for the final remarks.
No, first of all, thank you for attending. Again, I would like to reiterate that 2025 has been a very strong year, where we have achieved a record AUM, record profitability, and record top line. Clearly, it's also a year where we have done progress in dealing with the legacy matters, and we close successfully our 2023 and 2025 strategic cycle, and we are very confident starting in a position of strength, the 2026-2028 cycle. And as management team, we are committed in executing our sustainable and profitable growth strategy as we have done in the previous period. With this, thank you very much for your attention.