The Swiss bank, which operates in multiple regions, gave a broadly positive set of results, although not all of the measures were illustrated in actual hard numbers.
Julius Baer said its profits “rose significantly” in the first ten months of 2021 amid growth in client assets and improvements to cost efficiency, aided by almost no credit losses.
The Zurich-listed bank said assets under management rose to SFr484 billion ($520.2 billion) at the end of October 2021, a year-to-date increase of 12 per cent. The increase was driven by continued net new money inflows (4.4 per cent on an annualised basis) as well as positive stock market performance and currency movements.
The gross margin for the first ten months of 2021 was slightly above 82 basis points. The decline from the 88 bps reported for the full year 2020 reflects a “softening” in client activity from the “exceptionally high levels” the bank witnessed last year when the pandemic broke out.
“The slowdown in client activity relative to the strong first quarter of 2021 continued from the second to the third quarter and well into October. Initial results for November, however, indicate a potential recovery for the final two months of the year. As a result, in the July to October period, the gross margin contribution from brokerage commissions and from net income from financial instruments decreased compared to the level seen in the first half of 2021,” the bank said.
Julius Baer said credit quality remained “high” and there were no net credit impairment losses in the July to October 2021 period (after the SFr1 million recorded for the first six months of 2021).
The bank benefited from cost cuts brought about as a result of the SFr200 million gross cost reduction programme announced in February 2020. Consequently, the adjusted cost/income ratio for the first ten months of 2021 narrowed to a touch above 63 per cent, against 66 per cent for the whole of 2020.
On 2 March this year, Julius Baer launched a new 12-month programme to buy back up to SFr450 million purchase value of shares. By the end of October, a total of 4,832,000 shares had been repurchased at an aggregate cost of SFr 294 million, up from SFr77 million repurchased in 2020.
The bank’s BIS Common Equity Tier 1 capital ratio – a standard international measure of capital strength – rose to 16.7 per cent at the end of October 2021 (end 2020: 14.9 per cent).
Julius Baer issues full-year 2021 results on 2 February.
In early October, Julius Baer wrapped up the deal in which it bought 83 per cent of Zurich-based real estate service provider KMP, aka Kuoni Mueller & Partner. The remaining shares are held by the KMP partners, as minority shareholders.
Earlier in November, the bank issued a report on the concerns and goals of ultra-high net worth families.