A drive to bring in high-calibre RMs last year is bearing fruit in terms of net inflows, the Swiss bank said.

Julius Baer said its assets under management rose 6 per cent in the first four months of this year, reaching SFr356 billion ($364.9 billion).

The increase was driven by "significant" net inflows and market performance, partly offset by the weakening of the US dollar relative to the Swiss franc, the Zurich-listed lender said today.
The private bank said that last year’s investments in attracting senior relationship managers has started to accelerate net inflows to the middle of the 4-6 per cent target range (annualised).

Compared to the second half of 2016, the gross margin recovered by 2 basis points to close to 90 bps. This increase was driven mainly by broadly equal improvements in the client-activity-driven and asset-based components of net commission and fee income, it said.

Spending on hiring RMs last year increased the bank's costs but the arrival of new new money and operating income has taken the cost/income ratio down to 71 per cent, having gone up to 73 per cent in the secoind half of last year. "In line with the guidance provided earlier, and as the anticipated incremental revenue benefits are expected to continue to build up, the cost/income ratio** is expected to normalise close to the upper end of the 64-68 per cent medium-term target range in 2017, and into the range in 2018," it said.

At the end of April 2017, Julius Baer's BIS [Bank for International Settlements] total capital ratio stood at 17.8 per cent and its BIS CET1 [common equity tier] capital ratio at 14.2 per cent, above the group’s own floors of 15 per cent and 11 per cent, respectively, and significantly above the regulatory minimums of 12.2 per cent and 8 per cent, respectively.

Julius Baer Group’s detailed financial results for the first half of 2017 will be published on 24 July 2017.