Interim Management Statement for the first four months of 2011
Julius Baer Group’s assets under management (AuM) rose to CHF 173 billion per end of April 2011, an increase of 2% vs. year-end 2010. Total client assets increased to CHF 271 billion.
The AuM increase was driven mainly by continued solid net new money inflows as well as a marginally positive market performance, whilst the currency impact was again negative, with the impact from the weakening US dollar outweighing the increase in the euro. Net new money inflows were on an annualised basis well into the Group’s 4–6% medium-term target range. The continued solid contribution from growth markets again outstripped a lower growth in Western Europe. The onshore German business again achieved strong net new money inflows, with the additional team that came on board in January getting off to a very good start.
The gross margin in the first four months of the year improved from the levels achieved in the second half of last year and was just above the gross margin achieved for the full year 2010, helped by a modest improvement in client transaction levels. The cost/income ratio continued to be impacted by the strong Swiss franc but improved slightly from the 67.6% reported for the second half of 2010 (calculated on the same basis). Given the ongoing strengthening of the Swiss franc, the Group continued its measures aimed at reducing the expenses on a sustainable basis; some of these measures are expected to start showing a positive impact in the second half of the year.
The one-time payment to the German authorities, as reported on 14 April 2011, was paid in April and is booked under provisions and losses in the financial results.
The Julius Baer Group continued to enjoy a position of significant excess capital as expressed by its BIS Tier 1 ratio (under Basel 2.5) of approximately 22% as at the end of March 2011. The previously announced share buyback programme is expected to be launched on 23 May 2011, under the ticker symbol BAERE.VX. The buyback programme of up to 5% of the share capital outstanding per the end of 2010 and with a maximum value of CHF 500 million will run until the next Ordinary Annual General Meeting, scheduled for 11 April 2012.
On 3 May 2011 Julius Baer underlined its clear strategic intention to build its business in Brazil, one of the most attractive and promising domestic wealth management markets worldwide, through the acquisition of a 30% strategic minority participation in São Paulo-based GPS, which has USD 5 billion (BRL 8.5 billion) assets under management.
Julius Baer Group’s financial results for the first half of 2011 will be published on 22 July 2011.
Please also note the disclaimer regarding forward-looking statements and financial information in the PDF attached on the right-hand side.