UPDATE 1-EFG confident on BSI deal, shares rise

jueves 31 de marzo de 2016 07:16 GYT
 

(Adds details from investor call, analyst quote, shares)

ZURICH, March 31 (Reuters) - EFG International AG reassured the market on Thursday that its planned takeover of Grupo BTG Pactual SA's Swiss private-banking unit BSI Ltd would go ahead on schedule.

EFG said last month it had agreed to pay 1.33 billion Swiss francs ($1.38 billion) for BSI in a deal that could catapult it into the nation's top five money managers for the wealthy, but analysts have pointed out implementation risks.

Asked about this, EFG International Chief Executive Joachim Straehle said in an investor call: "Given the fact that both banks have substantial know-how in merging, I am not too worried that we could not do that."

The wealth manager's shares, which have lost almost 16 percent of their value since the announcement on Feb. 22, and 49 percent so far this year, rose 2 percent by 1053 GMT.

EFG said it was on track to close the deal by the end of the year and reiterated that it saw cost synergies of around 185 million Swiss francs by 2019, including around 100 million from IT as the combined bank will operate on EFG's core banking platform from 2018.

EFG also provided additional financial details on BSI, whose CET1 capital ratio stood at 21.9 percent in 2015, compared with 12.8 percent at EFG. BSI's reported profit after tax was 128.8 million francs last year, versus 57.1 million at EFG, whose profit was hit by costs linked to the U.S. tax programme.

"BSI's numbers are now based on IFRS and therefore comparable to EFG's. This will help to better assess the numbers of the combined entity," Vontobel analyst Andreas Venditti, who has a Hold rating on the stock, said in a note.

Venditti said, however, that he was still seeing significant implementation risks attached to the deal due to the complexity of the integration process, as well as some risk of new litigation issues. He added that his price target of 7.50 francs was under negative review.

EFG put the book value of BSI at 1.477 billion francs under IFRS standards. It said the transaction was expected to boost earnings per share from 2018, excluding restructuring costs, with double-digit accretion in 2019. ($1 = 0.9615 Swiss francs) (Reporting by Michael Shields, Angelika Gruber and Silke Koltrowitz; Editing by Mark Heinrich)