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Julius Baer Reports Sharp Rise In Profits, AuM In 2013

Tom Burroughes

3 February 2014

, the Swiss private bank that has been transferring over assets from the non-US arm of a Bank of America Merrill Lynch business bought a year earlier, today said assets under management rose 34 per cent year-on-year to SFr254 billion ($280.5 billion).

Net new money was SFr7.6 billion; total client assets, including assets under custody, rose 26 per cent to SFr348 billion.

The Zurich-listed bank said its operating income rose by 26 per cent to SFr2.195 billion, and the gross margin remained at 96 basis points. Adjusted operating expenses went up by 29 per cent to SFr1.611 billion. The adjusted cost/income ratio was 71 per cent. Adjusted net profit, reflecting the underlying operating performance, went up by 19 per cent to SFr480 million and adjusted earnings per share (EPS) by 12 per cent to SFr2.24 per share.

IFRS net profit declined by 30 per cent to SFr188 million, as the improvement in operating results was more than offset by the impact (as planned) of the Bank of America Merrill Lynch business integration and restructuring expenses, the ongoing amortisation of acquisition-related intangible assets, and a provision in relation to the withholding tax treaty between Switzerland and the UK, the bank said in a statement.

Julius Baer said it had a “solid” capital position at the end of last year, with a BIS total capital ratio of 22.4 per cent and a BIS tier 1 capital ratio at 20.9 peer cent.

The bank’s board of directors will propose to the AGM on 9 April 2014 an unchanged ordinary dividend of SFr0.60 per share, to be paid out of the share premium reserve.

Referring to the BoA Merrill Lynch integration, Julius Baer said that based on current expectations, it expects that by the end of the integration process in early 2015 the group will achieve the asset transfer target, towards the lower end of the SFr57 billion to SFr72 billion range, which would thereby also reduce the maximum total transaction price.

“After a period of intense preparations, the implementation of the IWM integration process paid off in 2013, resulting in an impressive transfer of clients, assets and highly-rated IWM professionals to Julius Baer. In 2014, our focus will shift to improving the cost efficiency of the rapidly grown business, while not losing sight of our ambition to continuously deliver top-quality advice and services to our growing international base of sophisticated clients,” Boris Collardi, chief executive of Julius Baer, said.