* Assets under management fall 4 pct in first half
* First-half net outflows 5.5 bln Swiss francs
* First-half IFRS net profit 19.2 mln francs (Recasts with comments from the CFO, adds market reaction)
By Joshua Franklin
ZURICH, July 26 (Reuters) - Swiss private bank EFG International said on Wednesday it was unlikely to hit its target for attracting net new money until 2019 as clients continued to withdraw funds from BSI bank, which it bought last year.
EFG agreed to buy rival Swiss bank BSI Ltd from Brazil's BTG Pactual in February 2016 to nearly double in size so it could compete better in Switzerland's crowded private banking market.
But BSI has been mired in legal problems, chiefly related to transactions linked to the scandal-hit Malaysian sovereign fund 1MDB, which resulted in the closure of BSI's Singapore branch last year. Its offices in Como and Milan may also have to shut.
Following billions of dollars of client withdrawals last year, wealthy EFG customers withdrew a net 5.5 billion Swiss francs ($5.8 billion) in the first six months of 2017.
EFG said while it expected its business to stabilise in the second half and in 2018, it was unlikely to reach its medium-term target of 3 percent to 6 percent net new money growth until 2019.
"We believe for next year we should expect no attrition, hopefully then a good development, most probably still below target or at the low end of the target," Deputy CEO Piergiorgio Pradelli told a news conference to announce first-half results.
The net new money target, a closely-watched indicator of future earnings in private banking, is due to kick in once EFG has completed the integration of BSI, which is expected by the end of this year.
EFG's total assets under management fell 4 percent to 138.4 billion francs in the first half, below the average estimate in a Reuters poll of four analysts of 141 billion francs.
The net new money development "remains disappointing and is the main reason for our relatively cautious stance on the shares", wrote Baader Helvea analyst Tomasz Grzelak, who rates the stock "hold".
EFG shares were trading down 1 percent at 1215 GMT, paring gains after earlier jumping more than 6 percent.
For the first six months of the year, EFG posted a 19.2 million franc IFRS net profit.
That beat the average estimate in the analyst poll for a 15.6 million franc loss, though the forecasts ranged from a loss of 75 million to a profit of 20.9 million, as it was unclear how much of the cost of integrating BSI would be come in the period.
EFG had said previously it expected to spend 165 million francs this year integrating BSI.
$1 = 0.9533 Swiss francs Editing by David Clarke