Reports

Julius Baer's AuM Continues To Climb After Dutch Transfer

Tom Burroughes, Group Editor, London, 14 May 2014

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Julius Baer, which this week announced it has transferred client assets from the Merrill Lynch International Wealth Management business outside the US, announced today it has total AuM of SFr264 billion ($296.9 billion), up 4 per cent from the end of last year.

Switzerland’s Julius Baer, which this week announced it has transferred client assets from the Merrill Lynch International Wealth Management business outside the US, announced today it has total assets under management of SFr264 billion ($296.9 billion), up 4 per cent from the end of last year.

The AuM figure includes around SFr53 billion of Merrill Lynch IWM business, which the bank is in the final phase of transferring. Of that sum, SFr42 billion has been booked onto Julius Baer platforms and paid for.

Total client assets rose 3 per cent to SFr359 billion, the Zurich-listed firm said in a statement.

The increase in group AuM was bolstered by the inclusion of SFr6 billion from Brazilian subsidiary GPS, which was consolidated for the first time following the increase in ownership from 30 per cent to 80 per cent in March 2014. Other drivers were continued net inflows and a positive market performance, partly offset by a negative currency impact due to the appreciation of the Swiss franc against a number of leading currencies, especially the US dollar.

Net inflows were, on an annualised basis, within the 4-6 per cent medium-term range, with continued strong contributions from the growth markets and the local business in Germany, it said.

The gross margin improved to 95 bps, up 4 bps from the second half of 2013. Excluding the Merrill Lynch transfers, the extrapolated Julius Baer “stand-alone” gross margin was approximately 98 bps, up from approximately 96 bps in the second half of 2013, supported by an improvement in client transaction activity in all regions.

Julius Baer’s cost/income ratio – a closely-watched measure of a firm’s margins - was slightly above the 73.3 per cent realised in the second half of 2013.

“Due to the timing of the key IWM restructuring steps throughout the year, the cost/income ratio is expected to improve closer to the 65-70 per cent medium-term target range in the second half of 2014, subject to the development of the gross margin,” it said.

 At the end of March 2014, the Group’s BIS total capital ratio stood at 22.0 per cent and the BIS tier 1 ratio at 20.6 per cent, above the targeted floors of 15 per cent and 12 per cent, respectively.

After the end of April 2014, following the additional transfer of assets and the closing of the IWM transaction in the Netherlands in the weekend of 10-11 May, IWM AuM reported increased further to approximately SFr54 billion, of which SFr43 billion are booked on the Julius Baer platforms and paid for.

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