Interim Management Statement for the first four months of 2014 (1)
Assets under management CHF 264 billion, up 4% from the end of 2013 - Net new
money well within medium-term target range - IWM productivity advancing
towards 2015 target - IWM-related restructuring on track
Zurich, 14 May 2014 - At the end of April 2014, Julius Baer Group's assets
under management (AuM) amounted to CHF 264 billion, an increase of 4% from the
end of 2013. This included approximately CHF 53 billion from Merrill Lynch's
International Wealth Management (IWM) business outside the US, which Julius
Baer is in the final phase of transferring, of which CHF 42 billion was booked
on the Julius Baer platforms and paid for. Total client assets grew by 3% to
CHF 359 billion.
Improved gross margin, net new money well within target range
The increase in Group AuM was supported by the inclusion of CHF 6 billion from
Brazilian subsidiary GPS, which was consolidated for the first time following
the increase in ownership from 30% to 80% in March 2014. Other drivers were
continued net inflows and a positive market performance, partly offset by a
negative currency impact due to the appreciation of the Swiss franc against a
number of leading currencies, especially the US dollar. Net inflows were, on
an annualised basis, well within the 4-6% medium-term range, with continued
strong contributions from the growth markets and the local business in
The gross margin improved to 95 bps, up 4 bps from the second half of 2013.
Excluding IWM, the extrapolated Julius Baer 'stand-alone' gross margin was
approximately 98 bps, up from approximately 96 bps in the second half of 2013,
supported by an improvement in client transaction activity in all regions.
The Group's cost/income ratio was slightly above the 73.3% realised in the
second half of 2013. Due to the timing of the key IWM restructuring steps
throughout the year, the cost/income ratio is expected to improve closer to
the 65-70% medium-term target range in the second half of 2014, subject to the
development of the gross margin.
Julius Baer remains strongly capitalised. At the end of March 2014, the
Group's BIS total capital ratio stood at 22.0% and the BIS tier 1 ratio at
20.6%, well above the targeted floors of 15% and 12%, respectively.
IWM productivity advancing towards 2015 target
After the end of April 2014, following the additional transfer of assets and
the closing of the IWM transaction in the Netherlands in the weekend of 10-11
May, IWM AuM reported increased further to approximately CHF 54 billion, of
which CHF 43 billion are booked on the Julius Baer platforms and paid for.
The first four months of 2014 brought significant progress on the productivity
of the IWM business. The former IWM relationship managers already started to
contribute to net new money, and, at 83 basis points (bps), the extrapolated
gross margin on the IWM AuM advanced close to the 2015 target of 85bps.
In Hong Kong and Singapore, the IWM integration process was completed
successfully at the beginning of the year, with a very high asset transfer
rate of over 80% and with the gross margin on the IWM AuM in Asia advancing
very close to the Julius Baer 'stand-alone' gross margin in Asia.
Integration-related restructuring on track
The previously communicated restructuring following the completion of the
majority of the IWM asset transfers is on track. During the first four months
of 2014, on a net basis, the integration-related rightsizing resulted in more
than 100 employees leaving the Group, thereby enabling the Group to make good
progress according to plan towards the realisation of the transaction-related
Julius Baer Group's detailed financial results for the first half of 2014 will
be published on 22 July 2014.
(1) Based on unaudited management accounts
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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
359 billion at the end of April 2014, including CHF 264 billion of assets
under management. 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), comprising 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 in key locations including Dubai, Frankfurt, Geneva, Hong Kong,
London, Lugano, Monaco, Montevideo, Moscow, Singapore and Tokyo.
For more information visit our website at www.juliusbaer.com
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