Julius Baer Group reports eight per cent increase in AUM
Julius Baer Group has reported an increase in assets under management (AuM) of eight per cent in the first six month of 2014 to CHF274 billion.
The increase was led significantly by net new money of CHF7.5 billion (six per cent annualised), in essence as much as in all of 2013, and CHF6 billion from the first-time consolidation of the Brazilian wealth management business GPS.
Total client assets (including assets under custody) grew by seven per cent to CHF372 billion.
Operating income rose by 15 per cent from the year-ago period to CHF1,236 million, resulting in a gross margin of 95 basis points (bps). Adjusted operating expenses went up by 16 per cent to CHF882 million, resulting in an adjusted cost/income ratio of 70.8 per cent.
Adjusted net profit, which reflects the underlying operating performance, improved by 10 per cent to CHF288 million and adjusted earnings per share (EPS) by eight per cent to CHF1.32.
IFRS net profit increased by 56 per cent to CHF179 million and IFRS EPS by 53 per cent to CHF0.82.
With a BIS total capital ratio of 23.9 per cent and a BIS tier 1 capital ratio of 22.4 per cent, the capital position remained significantly in excess of the group’s targeted floors of 15 per cent and 12 per cent respectively.
The integration of Merrill Lynch’s International Wealth Management (IWM) business entered its final phase. At 30 June 2014, group AuM included CHF56 billion (at current market values) from IWM, of which CHF48 billion was booked on the Julius Baer platforms.
In July, a further CHF2 billion of IWM AuM from various locations was transferred to the Julius Baer platforms, taking AuM booked to CHF50 billion (at current market values).
Julius Baer and Bank Leumi have entered into a strategic cooperation and referral agreement. Leumi will transfer its Swiss-based private banking business (with AuM of CHF6 billion) to Julius Baer, and Julius Baer intends to acquire Leumi’s private banking subsidiary in Luxembourg (with AuM of CHF1 billion).
Boris FJ Collardi, chief executive officer of Julius Baer Group, says: “We are very pleased with the strong financial performance in the first half of 2014. The substantial further asset growth of the group and the excellent net new money result led to an all-time high in assets under management. Together with the initial and accelerating materialisation of the IWM-related efficiency gains this helped deliver a substantial increase in profit. The IWM integration has entered the final phase, and it was impressive to see how the combined businesses contributed to the strength of the group’s performance.”
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