The private bank recorded a profit of 532 million francs in the first half of the year. Compared to the same period last year, that is 18 percent more. Assets under management also rose slightly by 4 percent
At CHF 2.03 billion, operating income was well above the previous year’s figure. In the interest business in particular, income increased thanks to the rise in interest rates. The effect more than offset a decline in commission and fee income due to lower client activity.
Accordingly, Julius Baer earned significantly more on the assets under management than in the previous year.
Inflow of new money partly responsible for higher assets under management
Assets under management were CHF 441 billion at the end of June compared to CHF 429 billion at the end of April. Compared to the end of 2022, assets under management have increased by 4 percent.
On the one hand, the increase in customer assets was due to a net inflow of new money of CHF 7.1 billion in the first half of the year, after the bank had reported slight outflows a year ago. However, the level of net inflows was impacted by further deleveraging by customers.
Yes, we have benefited from CS and UBS.
On the other hand, a positive development of the global equity and bond markets also offered support, even if this was partially offset by the appreciation of the Swiss franc against the dollar and the euro.
The bank benefits from the CS crisis
The takeover of the crisis bank Credit Suisse by its competitor UBS has brought new customer money to the Swiss asset manager Julius Baer. “Yes, we have benefited from CS and UBS,” says the managing director, Philipp Rickenbacher.
The bank also benefited from the crisis when recruiting new customer advisors. In the first half of the year, she hired people from both CS and UBS.
Customers remain cautious
Meanwhile, the mood among wealth management clients remains cautious: the major uncertainties such as the war in Ukraine or the tensions between the USA and China have not yet disappeared. Julius Baer felt this in a relatively small proportion of transaction-based revenues in the first half of the year.
CFO Evie Kostakis also said that the reduction in external financing by customers is not likely to disappear anytime soon: she explained this with increased interest costs and, above all, with the inverted yield curve in important currencies, which do not offer a favorable environment for investments in fixed-income investments.