The private bank reported a broadly strong set of results for the first half of the year. It said that some of its growth in net new assets was affected by client deleveraging. Clients in all of the lender's main regions put new money into the business.
Julius Baer today said that its profit, on an IFRS accounting basis, rose 18 per cent in the six months to end-June from a year before reaching SFr532 million ($614 million). When adjusted for merger and acquisition-related items, profit rose 14 per cent to SFr541 million, the Zurich-listed bank said in a statement.
The bank has seen the competitive language in its domestic Swiss and international market change significantly over the past six months as its two largest rivals in Switzerland, UBS and Credit Suisse, have gone through a takeover, leaving Julius Baer as the second-largest bank in the country.
“A complex environment has not hindered us from achieving a strong start to the current strategy cycle – on the contrary, it has even allowed for a tactical acceleration of our push for scale in our key markets,” Philipp Rickenbacher, Julius Baer CEO, said.
Assets under management stood at SFr441 billion, a year-to-date increase of 4 per cent, supported by net new money of SFr7.1 billion. The level of net inflows continued to be affected by client deleveraging, reflecting current market conditions. Excluding that effect, net new money amounted to SF9.2 billion (H1 2022: SFr2.6 billion). The first half of the year saw solid net inflow contributions from clients domiciled in Switzerland, Europe (especially the UK, Ireland, Spain, Luxembourg), Asia (especially Hong Kong, India), Israel, and the Middle East.
Operating income grew by 9 per cent year-on-year, with the positive impact of higher interest rates more than offsetting a decline in net commission and fee income.
The bank posted a gross margin of 93 basis points, up from 81 bps a year earlier. Julius Baer’s adjusted cost/income ratio was 65 per cent, narrowing from 67 bps a year before.
The number of relationship managers rose with the addition of 57 full-time equivalents year-to-date totalling 1,305.
At the end of June, Julius Baer had a Common Equity Tier 1 ratio – a common international measure of a bank’s capital buffer – of 15.5 per cent, rising from 14 per cent at the end of 2022.