Julius Baer said its net profit during 2010 rose 6 per cent, year-on-year, to SFr504 million (around $526 million), shrugging off the adverse impact of the Swiss franc’s rise against currencies such as the dollar.

Julius Baer, one of the largest Swiss banks, said its net profit during 2010 rose 6 per cent, year-on-year, to SFr504 million (around $526 million), shrugging off the adverse impact of the Swiss franc’s rise against currencies such as the dollar.

As a result of the strong figures and a plentiful cash position, the firm proposed to increase its dividend by 50 per cent to SFr0.6 per share and buy back 5 per cent of its outstanding share capital, with a maximum limit of SFr500 million.

Operating income grew by 13 per cent as the result of a 19 per cent increase in average assets under management and a decline in the gross margin from 111 to 105 basis points, the bank said in a statement today.

Operating expenses increased by 16 per cent, including the first-time consolidation of ING Bank (Switzerland) Ltd (ING Bank) in 2010. Due to the decline in the gross margin and partly as a result of the Swiss franc, the cost/income ratio increased to 65 per cent.

Total client assets increased by 11 per cent to SFr267 billion. Assets under management grew by 10 per cent to SFr170 billion, on the back of the acquisition of ING Bank, improving net inflows, and a positive market performance, partly offset by a “very significant negative currency impact”, Julius Baer said.

Assets under custody rose by 12 per cent to SFr98 billion.

Net new money rose to SFr9 billion or 6 per cent of the start-of-year AuM, mostly as a result of strong inflows in the growth markets and from the group's domestic German business.

At the end of the year, the group had a robust capital base, as measured by its Basel tier 1 ratio, of 23.8 per cent.