By Elena Vardon

Shares in EFG International dropped after the Swiss private bank's annual net profit was hurt by an unexpected provision linked to a U.K. court case.

The stock fell nearly 10%, hitting a low of 17.12 Swiss francs in morning trading on Wednesday.

EFG set aside 59.5 million francs ($77.3 million) to address a previously disclosed legacy matter relating to a lawsuit brought about by Kuwait's public pension fund. The bank was able to estimate the financial hit as visibility increased following the start of the trial last March, it said.

While this charge was partly offset by the one-off 45.4 million-franc insurance recovery gain from proceedings with a Taiwanese insurer, analysts hadn't modeled for the provision, causing the group's bottom line to miss expectations by a wide margin.

"We made further progress in the ongoing resolution of legacy matters. With our strong operating performance we absorbed this impact and delivered a record net profit," Chief Executive Giorgio Pradelli said.

The Zurich-based group reported a net profit of 325.2 million francs for 2025. This is only 1% higher than its result for 2024 as heavier costs and the legal provision weighed on earnings despite record full-year revenue of 1.67 billion francs.

Assets under management stood at 185.0 billion francs at the end of the period, up 12% compared with a year prior. Growth was driven by its recent acquisitions and an increase in total client assets overseen by the bank, on which it charges fees.

Net new assets reached 11.3 billion francs and were fueled by inflows from all of its regions and the integration of client relationship officers hired in the past three years, it said. This represents an annualized growth rate of 6.8%, above the top end of its target range.

EFG--whose largest shareholder is the Greek shipping family Latsis--proposed a dividend of 0.65 franc a share. The bank also plans to buy back up to 9 million of its own shares by July 2027 to fund share-based employee compensation.

"While the provision for the legacy matter and the acquisitions had a one-off impact on our ratios, our gross capital generation remains very strong and enables us to continue looking for further suitable acquisitions in line with our M&A assessment criteria," finance chief Dimitris Politis said in a call with reporters.

EFG's common equity tier 1 ratio--a key measure of capital--stood at a worst-than-expected 14% at the end of the period, down from 17.7% a year prior.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

February 18, 2026 05:52 ET (10:52 GMT)

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