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Place de cotation: SWX Swiss
Exchange Reuters: BAER.VX Bloomberg: BAERVX
Julius Baer is the leading
dedicated wealth manager in Switzerland. The Group, which has roots dating
to the nineteenth century, concentrates exclusively on private banking
and asset management for sophisticated private and institutional clients.
With more than 4,200 employees worldwide, the Group managed assets in excess
of CHF 360 billion at the end of June 2008. The Julius Baer Group's global
presence comprises more than 30 locations in Europe, North America, Latin
America and Asia, including Zurich (head office), Buenos Aires, Dubai,
Frankfurt, Geneva, Hong Kong, London, Lugano, Milan, Moscow, New York,
Singapore and Tokyo. Bank Julius Baer and GAM, a global asset manager focused
on active and alternative wealth management, are the key companies of the
Group. The registered shares of Julius Baer Holding Ltd. are listed on
the SWX Swiss Exchange and form part of the Swiss Market Index (SMI) which
comprises the 20 largest and most liquid stocks.
http://www.juliusbaer.com
Julius
Baer Group: Interim Management Statement for the period to 11 November
2008
issued
in accordance with the EU Transparency Directive
Significant
net new money in Private Banking - Outflows in Asset Management - Negative
market impact on AuM - All businesses contributing to strong profits -
Sound balance sheet with solid capital base
Zurich,
11 November 2008 --- Year-to-date, the Julius Baer Group continued to show
forceful business expansion in Private Banking and ongoing product development
with strong investment performance relative to peers within Asset Management.
Group assets under management were impacted by the large market declines
across most asset classes, client withdrawals within Asset Management as
well as the strengthening of the Swiss Franc against European currencies,
partly offset by significant net new money in Private Banking.
Net
inflows in Private Banking were significantly above last year's level,
supported by Julius Baer's strengthened franchise and with all Private
Banking regions contributing to the increase. The target of adding a net
50 to 60 private bankers by year end has already been reached. In the second
half of 2008, offices have been or will be opened in Jakarta, Cairo, St.
Gallen and St. Moritz. The continued increase in new assets and clients
creates a solid base for future revenue growth. Given the market environment,
Bank Julius Baer is re-evaluating all business initiatives to ensure that
resources are deployed to the most attractive opportunities. Therefore
the Investment Products division will be even further aligned with Private
Banking to maximise efficiency and service quality while the expansion
of the fund range will be de-emphasised. This will allow Bank Julius Baer
to greater focus its resources on the proven, still attractive growth opportunities
to expand its private banking operations. Given these changes, Beat Wittmann,
CEO of the Investment Products division, after advising on the transition,
will be leaving the Group to pursue other opportunities.
The
asset management industry has faced a challenging environment through October,
with private and retail clients redeeming assets from hedge and equity
funds, though the sophisticated institutional segment increased allocations
during the period given the higher expected future returns created by the
market dislocation. GAM, with largely private client assets, continued
to experience net outflows, with the rate accelerating in October as market
stress peaked. GAM's core multi-strategy funds of hedge funds are now meaningfully
outperforming the relevant indices year-to-date; this, plus differentially
strong long term track records, should create important growth opportunities
once markets stabilise and as the industry consolidates to a smaller set
of high quality providers. At Artio Global, though second half net flows
turned negative, total net flows remained positive year-to-date supported
by the strength of the large institutional client base. Artio Global's
international equity funds continue their outstanding long-term track record
and are now again performing ahead of their relevant indices year-to-date.
Julius Baer intends to IPO Artio Global when market conditions allow.
The
Group's net operating income through October was down by approximately
ten percent compared to the same period of last year. Targeted cost-cutting
in all business areas, overall lower performance compensation accruals
as well as currency impacts resulted in slightly reduced operating expenses
despite ongoing investment in business expansion. Given the decreased asset
base, Julius Baer will continue to focus on stringent cost management,
while maintaining key growth initiatives.
The
Julius Baer Group continues to enjoy a sound balance sheet with low leverage,
and a solid capital base. The Group has repurchased CHF 300 million of
own shares since the inception of the buy-back programme in April 2008.
The BIS Tier 1 ratio is at the targeted level of 12% under Basel II, and
Bank Julius Baer & Co. Ltd. continues to be rated Aa3 by Moody's.
Contacts:
Media
Relations: Tel. +41 (0)58 888 5777
Investor
Relations: Tel. +41 (0)58 888 5256
The
2008 annual results of the Julius Baer Group will be released on 6 Februry
2009 and the 2009 half-year results on 24 July 2009
Julius
Baer: With net profit of CHF 510 million*, Julius Baer managed to achieve
the same result as in the first half of 2007 despite weak markets and a
strong Swiss franc - Achieved net new money of CHF 10 billion
Despite the challenging
market environment, the Julius Baer Group achieved a net profit of CHF
510 million* in the first half of 2008, just 2% below the CHF 518 million
of the first half of 2007. Earnings per share (EPS) rose by 5% to CHF 2.45.
Due to the appreciation
of the Swiss franc and the weak equity and debt markets, assets under management
declined to CHF 364 billion, 10% lower than at the end of 2007. Net new
money contributed CHF 10 billion overall, with Private Banking attracting
CHF 8 billion.
The investment in future
growth continued successfully, as reflected in further key hirings and
the opening of new locations.
As a result of its exclusive
focus on the wealth management business, Julius Baer did not experience
any losses related to the credit and liquidity crisis.
"The Julius Baer Group
has managed to strike the right balance between stepping up its investment
in the future, given the extraordinarily favourable circumstances for growing
Bank Julius Baer's global franchise, and protecting the Group's profitability.
Whilst the weak equity and debt markets as well as the strong Swiss franc
have reduced our asset base, with an impact on our profits, Bank Julius
Baer has benefited from our pure-play wealth management strategy, as evidenced
by the significant net new money inflows the Bank has achieved," sums up
Johannes A. de Gier, Group CEO.
Balancing growth and profitability
in a challenging market environment
Assets under management
of the Julius Baer Group amounted to CHF 364 billion on 30 June 2008, down
10% from CHF 405 billion at the end of 2007. Net new money totalling CHF
10 billion was more than offset by the negative market performance of CHF
32 billion and a negative currency impact of CHF 19 billion. In addition,
assets under custody increased by 9% to CHF 75 billion.
Operating income was 2%
lower at CHF 1,602 million compared to the first half of 2007. As a result
of the decreased asset levels and subdued client activity, net fee and
commission income declined by 9% to CHF 1,195 million. Net interest income
rose by CHF 53 million or 32% to CHF 221 million following the increased
lending to private clients, higher deposits as well as higher margins.
Net trading income increased by 28% to CHF 178 million, primarily driven
by foreign exchange trading.
Operating expenses at
CHF 949 million were slightly lower than last year (CHF 960 million), aided
by a positive currency impact and despite continued investments in growth.
Personnel expenses were down 2% at CHF 673 million as the impact of the
10% year-on-year staff increase, from 3,869 to 4,272, was offset by lower
performance-related compensation accruals and a positive currency impact.
General expenses, including valuation adjustments, provisions and losses,
remained unchanged at CHF 254 million, even with the continued business
expansion of Bank Julius Baer. All in all, the cost/income ratio increased
slightly to 58.5% after 57.5% in the first half of 2007.
Profit before taxes declined
by 3% to CHF 653 million. After deduction of taxes amounting to CHF 143
million, representing a tax rate of 22%, net profit reached CHF 510 million*,
just 2% down from H1 2007. Following share buyback programmes, EPS increased
by 5% to CHF 2.45. As part of the current share buyback programme (2008-2010)
of up to CHF 2 billion, 1,565,000 shares in the total amount of CHF 112.4
million had been repurchased as of 22 July 2008.
Total assets were down
by CHF 3.3 billion at CHF 43.6 billion at the end of June 2008, mainly
driven by the lower level of client deposits and structured products volume
as compared to the end of 2007. Total equity rose by CHF 160 million to
CHF 6.6 billion, and the BIS Tier 1 capital by CHF 313 million to CHF 2.3
billion. With a BIS Tier 1 ratio of 13.8% under Basel II (year-end 2007:
12.9% under Basel I), the Julius Baer Group continues to enjoy a very solid
financial base. Return on equity was at 28.8% compared to 27.9% in the
first half of 2007.
Bank Julius Baer continues
to attract significant net new money
Assets under management
in the segment Bank Julius Baer (Private Banking and Investment Products)
declined by CHF 12 billion or 5% to CHF 222 billion in the first half of
2008. Net new money contributed a healthy CHF 12 billion, representing
an annualised growth rate of 10%, while market and currency performance
had a negative impact of CHF 24 billion. Operating income increased by
3% to CHF 977 million year on year, and operating expenses rose by 9% to
CHF 587 million as a result of continued investments in front-related areas.
As a consequence, profit before taxes for Bank Julius Baer declined by
4% to CHF 390 million. Assets under management of the Private Banking division
were 5% lower at CHF 148 billion despite significant net new money of CHF
8 billion to which all regions contributed, again with a major share from
growth markets, Asia in particular. Assets under management in the Investment
Products division fell by 5% to CHF 74 billion, with net new money amounting
to CHF 3 billion.
Assets under management
in the segment Asset Management (GAM and Artio Global) declined by CHF
29 billion or 17% to CHF 142 billion in the first half of 2008, mainly
as a result of negative market performance and the currency impact on assets
under management as reported in Swiss francs, which had a combined negative
impact of CHF 28 billion. At the end of June 2008, GAM had CHF 68 billion
of assets under management, and Artio Global, the US asset management business
to be IPO-ed when market conditions allow, CHF 74 billion, with the latter
continuing to attract substantial net new money. During this highly challenging
period for leveraged hedge fund style investments, GAM experienced net
outflows but was able to improve its margins from H1 2007 levels. The segment's
operating income fell by 8% to CHF 594 million, and operating expenses
dropped by 13% to CHF 316 million. As a consequence, profit before taxes
was down 3% to CHF 278 million.
The documents accompanying
the results conference (presentation, Business Review First Half 2008,
Half-year Report 2008 and press release) are available at www.juliusbaer.com.
Contact
Media: +41 (0) 58 888
5777
Investors: +41 (0) 58
888 5256
The periodic Interim Management
Statement will be released on 11 November 2008, and the 2008 annual results
of the Julius Baer Group on 6 February 2009. |
