Julius Baer Group: Presentation of the 2013 half-year results

Presentation of the 2013 half-year results* for the Julius Baer Group

Assets under management up 15% to CHF 218 billion - Adjusted net profit up 26%
to CHF 261 million - IWM integration advancing rapidly across multiple
locations

  *Assets under management (AuM) grew to CHF 218 billion, up by 15% since the
    end of 2012. This included approximately CHF 24 billion from Merrill
    Lynch's International Wealth Management (IWM) business outside the US,
    which Julius Baer is in the process of acquiring. Net new money was CHF
    3.4 billion (3.6% annualised). Total client assets (including assets under
    custody) grew by 10% to CHF 304 billion.
  *Operating income rose by 25% year on year to CHF 1,077 million, and the
    gross margin improved to 102 basis points (bps) (H1 2012: 98bps) on an
    improvement in client activity.
  *Adjusted operating expenses went up by 23% to CHF 758 million.**
  *As a result, the adjusted cost/income ratio improved to 69%.
  *Adjusted net profit grew by 26% to CHF 261 million (H1 2012 restated2: CHF
    208 million) and adjusted earnings per share (EPS) by 17% to CHF 1.23 (H1
    2012 restated2: CHF 1.04).
  *IFRS net profit declined by 30% to CHF 114 million (H1 2012 restated2: CHF
    162 million), as the strong operational improvement was more than offset
    by the impact of the CHF 99 million IWM-related integration and
    restructuring expenses as well as a CHF 28 million (net of taxes: CHF 22
    million) charge in relation to the withholding tax treaty between
    Switzerland and the UK.
  *The Group's BIS total capital ratio stood at 24.5% and its BIS tier 1
    capital ratio at 22.9%, supported by the pre-funding in 2012 of the
    acquisition of IWM.
  *The IWM integration is advancing rapidly across multiple locations. After
    the end of June 2013, a further CHF 22 billion of IWM AuM were transferred
    to Julius Baer, taking total IWM AuM reported to CHF 47 billion.

Zurich, 22 July 2013 --- Boris F.J. Collardi, Chief Executive Officer of
Julius Baer Group Ltd., said: "On the back of a recovery in client activity
and better cost efficiency, our Group markedly improved its operational
performance in the first half of 2013. At the same time, we made tremendous
progress in the integration of IWM, which makes us confident that we will
achieve our goal of having 80% of targeted IWM client assets reported at
Julius Baer by the end of this year."

Total client assets amounted to CHF 304 billion, an increase of 10% since the
end of 2012. Assets under management grew by 15%, or CHF 28 billion, to CHF
218 billion. This included approximately CHF 24 billion of AuM reported from
IWM, of which CHF 12 billion were booked on the Julius Baer platforms and paid
for. A further update on IWM, including on AuM transferred after the end of
June, is located towards the end of this media release. Outside the
contribution from IWM, the increase in AuM was the result of net new money of
CHF 3.4 billion, a positive currency impact of CHF 2 billion as well as CHF
0.2 billion from the acquisition of a 60% equity participation in TFM Asset
Management Ltd., partly offset by the disposal on 31 May 2013 of our former
Italian onshore subsidiary Julius Baer SIM SpA, with CHF 1 billion in AuM, as
well as by a marginally negative market performance of CHF 1 billion. The
market performance was impacted by several clients' exposure to
underperforming asset classes such as emerging market securities and gold as
well as by the global market corrections in June 2013, and occurred despite
the fact that Julius Baer again achieved a clearly positive performance across
practically all discretionary mandates it manages. Due to the Group's strong
focus on the successful transfer and integration of the IWM businesses, the
pace of stand-alone net hirings of RMs decelerated somewhat, which was one of
the factors behind the year-on-year slowdown in the net new money rate to 3.6%
(annualised). Net new money was driven by continued net inflows from the
growth markets and from the local business in Germany, while the inflows in
the cross-border European business were offset by tax-driven outflows. Assets
under custody came to CHF 86 billion, compared to CHF 88 billion at the end of
2012.

Operating income rose to CHF 1,077 million, a year-on-year increase of 25%,
above the 20% year-on-year increase in average AuM (to CHF 212 billion). The
gross margin (including the IWM businesses transferred in February, April and
at the end of May 2013) improved to 102 bps (H1 2012: 98 bps, H2 2012: 94
bps). Excluding IWM, the gross margin was 103 bps, while the gross margin on
the reported IWM AuM was 93 bps. In the second half of 2013, the weight of the
IWM businesses in the overall gross margin calculation will increase
significantly. Net commission and fee income went up by 27% to CHF 599
million, driven by the increase in average AuM and a recovery in client
transaction volumes. Net interest and dividend income declined by 15% to CHF
275 million as the benefit of the increase in loan volumes was more than
offset by a year-on-year decrease in dividend income on trading portfolios
from CHF 90 million to CHF 33 million. Excluding the latter, underlying net
interest and dividend income increased by 4% to CHF 242 million. Including the
aforementioned trading portfolios-related dividend income, underlying net
trading income improved by 53% to CHF 218 million mainly as a result of an
upturn in client-driven foreign exchange trading following higher volatility
in the currency markets. Unadjusted net trading income more than tripled to
CHF 184 million. Other ordinary results went up by 6% to CHF 19 million.

Revised accounting standards related to the Group's pension plan (IAS 19 -
Employee Benefits) that became effective on 1 January 2013 and are described
in the Group's Half-year Report 2013 resulted in a restatement of certain
expense and balance sheet items for the 2012 reporting period. The restatement
increases reported operating expenses for the full year 2012 by CHF 12 million
(H1 2012: increase of CHF 17 million, H2 2012: decrease of CHF 5 million) and
reduces 2012 adjusted net profit by CHF 10 million (H1 2012: decrease of CHF
13 million, H2 2012: increase of CHF 3 million). In the first half of 2013,
adjusted operating expenses increased by 23% to CHF 758 million from a
restated level of CHF 614 million in the first half of 2012. The increase in
expenses was partly attributable to the transfer of the IWM businesses in
February, April and at the end of May 2013. The total number of employees
increased by 23% year on year to 4,505 full-time equivalents (FTEs), including
a net 553 from IWM. Out of the total staff, 138 FTEs are fully assigned to the
IWM integration, and the expenses related to this group are therefore included
in the IWM-related restructuring and integration expenses and consequently
excluded from the adjusted results. The number of relationship managers grew
by 165 to 966 FTEs, of which 157 from IWM. Mainly as a result of the increased
headcount, the adjusted personnel expenses went up by 16% to CHF 488 million
from a restated level of CHF 421 million a year ago. Adjusted general expenses
went up by 41% to CHF 226 million, impacted by a shift from a CHF 11 million
release to a CHF 12 million charge for valuation allowances, provisions and
losses. Excluding valuation allowances, provisions and losses, adjusted
general expenses increased by 25% to CHF 214 million following the transfer of
the IWM businesses and in line with the increase in operating income. Adjusted
general expenses included CHF 16 million of costs related to the US tax
situation, up from CHF 14 million a year ago.

As a result, the adjusted cost/income ratio*** improved to 69% (H1 2012
restated: 72%; H2 2012 restated: 71%). Excluding the expenses related to the
US tax situation, the adjusted cost/income ratio was 68%.

Adjusted profit before taxes went up by 28% to CHF 319 million from a restated
level of CHF 249 million a year ago. The related income taxes increased from a
restated level of CHF 41 million to CHF 57 million, representing a tax rate of
18%, up from a restated rate of 16.6%. Adjusted net profit consequently
increased by 26% to CHF 261 million from a restated level of CHF 208 million,
and, following the higher share count after the capital increases in October
2012 and January 2013, adjusted earnings per share came to CHF 1.23, up by 17%
from a restated level of CHF 1.04.

As in previous years, in the analysis and discussion of the results in the
Media Release and the Business Review, adjusted operating expenses exclude
integration and restructuring expenses (CHF 99 million, almost entirely
related to IWM, up from CHF 1 million in the prior-year period) as well as the
amortisation of intangible assets related to acquisitions (CHF 48 million, up
from CHF 45 million a year ago). Additionally, concerning the guarantee
payments that Swiss banks were obliged to provide under Swiss law as part of
the withholding tax agreement between Switzerland and the UK, the Swiss
Bankers Association stated on 5 July 2013 that it cannot be ruled out that
none or only a small part will be recovered. A provision of CHF 28 million
(net of taxes: CHF 22 million) has been taken to cover the expected payment in
relation to this. This amount has also been excluded from the adjusted
operating expenses. Including the above items, as presented in the IFRS
results in the Group's Half-year Report 2013, net profit was CHF 114 million
in the first half of 2013, down 30% from a restated CHF 162 million in the
first half of 2012, as the strong improvement in operational performance was
more than offset by the IWM-related integration and restructuring expenses and
the UK withholding tax-related provision. On the same basis, and following the
higher share count after the capital increases in October 2012 and January
2013, EPS decreased by 34% to CHF 0.53, from the restated CHF 0.81 a year ago.

Balance sheet and capital developments

From a restated level of CHF 54.8 billion at the end of 2012, total assets
increased by 23% to CHF 67.2 billion. Over the same period, client deposits
went up by CHF 6.6 billion to CHF 45.7 billion, and the total loan book by CHF
3.1 billion to CHF 22.9 billion (comprising CHF 16.7 billion of collateralised
Lombard loans and CHF 6.2 billion of mortgages), resulting in a continued
conservative loan-to-deposit ratio of 0.50. The strong increase in loans and
deposits was partly the result of the acquisition last February 2013 of
Geneva-based Merrill Lynch Bank (Suisse) S.A. At the end of June 2013, total
equity was unchanged from a restated level of CHF 4.7 billion at the end of
2012, while BIS total capital amounted to CHF 3.7 billion and BIS tier 1
capital to CHF 3.5 billion. With risk-weighted assets at CHF 15.2 billion,
this resulted in a BIS total capital ratio (under the new Basel III framework)
of 24.5% and a BIS tier 1 capital ratio of 22.9%. The capital position and
ratios were supported by the pre-funding in the second half of 2012 of the
acquisition and integration of IWM. Over the next 12 to 18 months, as further
IWM client assets are transferred and paid for in stages and as the remaining
projected IWM-related transaction, integration and restructuring costs are
expensed, the Group's total and tier 1 capital ratios are expected to decrease
closer to the medium-term targeted levels.

IWM update

After the end of June 2013, a further CHF 22 billion of IWM AuM were
transferred to Julius Baer, taking total IWM AuM reported to CHF 47 billion,
of which CHF 19 billion were booked on the Julius Baer platforms and paid for.
Since the start of the IWM integration process on 1 February 2013, and
including the additional transfer milestones reached in July 2013, a total of
twelve IWM locations have now entered the transfer process. This encompasses
the largest IWM locations in Switzerland, Uruguay, Singapore, Hong Kong and
the UK, as well as two locations that are new to the Group, namely Luxembourg
and Spain. Including the July transfers, the total number of IWM staff at
Julius Baer has increased to 1,005 FTEs, of which 272 are relationship
managers. As a result of the strong progress made to date, the Group reaffirms
its target to acquire between CHF 57 billion and CHF 72 billion of IWM AuM by
January 2015. Of this targeted range, 80% are expected to be reported and 70%
to be booked on the Julius Baer platforms and paid for by the end of 2013. The
estimate for the total IWM-related transaction, restructuring and integration
costs to be borne by Julius Baer has been increased from approximately CHF 400
million to approximately CHF 455 million. This is mainly the result of higher
estimated costs related to the client onboarding process. All other
IWM-related targets are reaffirmed.

The results conference will be webcast at 9:30 a.m. (CEST). All documents
(presentation, Business Review First Half 2013, Half-year Report 2013 and this
media release) will be available as of 7:00 a.m. (CEST) at www.juliusbaer.com.

* The adjusted results as presented and commented in this Media Release and in
the Business Review are derived by excluding from the reviewed IFRS financial
statements the integration and restructuring expenses, the amortisation of
intangible assets related to acquisitions or divestments and in 2013 a CHF 28
million (net of taxes: CHF 22 million) charge in relation to the withholding
tax treaty between Switzerland and the UK

** Revised accounting standards related to the Group's pension plan that
became effective on 1 January 2013 and are described in the Group's Half-year
Report 2013 resulted in a restatement of certain expense and balance sheet
items for the 2012 reporting period.

*** Calculated using adjusted operating expenses, excluding valuation
allowances, provisions and losses.

Contacts

Media Relations, tel. +41 (0)58 888 8888

Investor Relations, tel. +41 (0)58 888 5256

Important dates

15 November 2013: Publication of 10-month Interim Management Statement

3 February 2014: Publication and presentation of 2013 full-year results,
Zurich

9 April 2014: Ordinary Annual General Meeting 2014, Zurich

About Julius Baer

Julius Baer is the leading Swiss private banking group with a focus on
servicing and advising sophisticated private clients and a premium brand in
global wealth management. Julius Baer's total client assets amounted to CHF
304 billion at the end of June 2013, with assets under management accounting
for CHF 218 billion. Bank Julius Baer & Co. Ltd., the renowned Swiss private
bank with origins dating back to 1890, is the principal operating company of
Julius Baer Group Ltd., whose shares are listed on the SIX Swiss Exchange
(ticker symbol: BAER) and form part of the Swiss Market Index (SMI) of the 20
largest and most liquid Swiss stocks.

Julius Baer is currently integrating Merrill Lynch's International Wealth
Management business outside the US. This will increase the Group's presence to
more than 25 countries and 50 locations. Headquartered in Zurich, we have
offices from Dubai, Frankfurt, Geneva, Hong Kong, London, Lugano, Madrid,
Monaco, Montevideo, Moscow, Shanghai to Singapore.

For more information visit our website at www.juliusbaer.com

Media Release Key Figures
Presentation
Business Review (Preprint)
Half-year Report (Preprint)

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