Zurich (awp) – Zurich wealth manager Julius Bär saw his assets under management increase slightly at the end of the first ten months of the year, supported in particular by positive market developments and strong inflows of new money. Analysts are impatiently awaiting the new boss who will take office at the beginning of January.
As usual, the establishment did not reveal detailed results at the end of the first ten months of the year, but an overview of its financial performance. At the end of October, the assets under management stood at 480 billion Swiss francs, after 474 billion at the end of June, according to a press release published Thursday. Over one year, assets grew by 12%.
This acceleration is the result of the solid performance of the financial markets, but also of net inflows of new money of 11 billion at the end of October, after only 3.7 billion at the end of June. Annualized growth in cash inflows amounts to 4.8%. New money inflows were particularly significant in Europe, particularly in the United Kingdom and Germany, but also in Asia (Singapore and India) and the Middle East (the United Arab Emirates).
Financial director Evangelia Kostakis expects these inflows to reach between 3% and 4% of assets under management this year. This level is expected to improve in 2025.
Both new customer advisors – 46 of whom have been hired since the start of the year – and those already in place have made it possible to turn around in recent months, after a difficult first half, added the manager during a conference call. .
The gross margin, on the other hand, fell to 83 basis points (bp), after having recorded 85 bp at the end of June. The adjusted cost-to-revenue ratio remained stable at 71%. The deconsolidation of its Italian subsidiary Kairos last May contributed to this poor performance.
These key figures are mixed compared to the forecasts of analysts consulted by the AWP agency. While the assets under management exceed market expectations, the gross margin was expected at 85 bps and the cost-income ratio at 70.4%.
Goals “out of reach”
Until now, the bank forecast in the medium term – for the period 2023-2025 – an adjusted pre-tax margin of between 28 and 31 basis points and an adjusted cost-income ratio below 64%. For adjusted pre-tax profit, the bank is targeting annual growth of 10%. The adjusted return on hard capital (CET1) is expected to be above 30% for the period.
For this year, the group expects to generate an IFRS net profit “significantly exceeding” that of 2023, i.e. more than the 454 million Swiss francs recorded last year.
In July, Julius Bär raised its gross savings target for the current strategic cycle to 145 million Swiss francs, compared to 120 million previously. The savings plan, which results in the elimination of 250 jobs and should be fully effective by the end of 2025, should save 140 million this year.
The Swiss Stefan Bollinger, current partner of the American bank Goldman Sachs and appointed last July as general director of the Zurich bank, will take up his position on January 9, 2025. Since the departure in February of Philipp Rickenbacher, who left in the wake of the losses suffered in the Signa affair, the current deputy general manager Nic Dreckmann takes over in the interim.
Performance over the first ten months of 2024 is broadly in line with Vontobel’s expectations, commented analyst Andreas Venditti. “Julius Bär recorded a solid trend between July and October,” he added in a comment. The expert believes, however, that the targets for 2025 are mostly still out of reach.
The market is increasingly interested in the arrival of the new general director Stefan Bollinger, scheduled for early next January, and in the possible changes he intends to make to relaunch the bank after the Signa affair, added Mr. Venditti.
On the stock market, investors applauded with both hands and Julius Bär shares ended up 4.71% at 55.58 Swiss francs, in an SLI up 0.39%.
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