Operating income increased by 13%, on the back of higher average assets under management. The gross margin increased to 107 basis points, improving from the level achieved in the second half of 2009. Operating expenses went up by 12%, resulting in profit before taxes improving by 14%. The cost/income ratio was stable at 63%. Net profit increased by 8% to CHF 261 million.
Total client assets increased to CHF 255 billion, an increase of 6% since the end of 2009. In the same period, assets under management increased by 8%, or CHF 12 billion, to CHF 166 billion, on the back of the acquisition of ING Bank (Switzerland) Ltd (´ING Bank´) and continued net inflows, and despite a negative currency impact. Assets under custody rose to CHF 89 billion, up by 2% since the end of 2009.
Net new money inflows were CHF 3.3 billion or 4.3% annualised.
The Julius Baer Group continued to manage its balance sheet conservatively and maintains a very solid capital base. The BIS tier 1 ratio stood at 22.8% as per 30 June 2010.
Boris F.J. Collardi, Chief Executive Officer of Julius Baer Group Ltd., said: "We achieved a strong financial performance in the first six months of 2010, despite a continued difficult market environment. We completed the integration of ING Bank successfully and ahead of schedule. Our sound financial position allows us to further pursue or even accelerate our growth initiatives. We continue to aim at positioning Julius Baer and its offering at the leading edge of global wealth management."
Total client assets grew to CHF 255 billion at the end of June 2010. Assets under management increased by 8%, or CHF 12 billion, to CHF 166 billion compared with CHF 154 billion at the end of 2009. The increase in assets under management was the result of the completion of the acquisition of ING Bank which added CHF 14 billion, net new money of CHF 3.3 billion, and a negative currency impact of CHF 4 billion due to the significant decline in the value of the euro especially towards the end of the reporting period. Net new money development was the result of the continued solid contribution from growth markets, which was partly offset by outflows due to certain changes in the regulatory environment and a slight impact from attrition in the former ING Bank client base during the integration, which was successfully completed at the end of May. Assets under custody amounted to CHF 89 billion, after CHF 87 billion at the end of 2009, an increase of 2%, mainly driven by CHF 1 billion in net new custody money.
Operating income rose by 13% year on year to CHF 916 million, on the back of 26% higher average assets under management partly offset by a lower gross margin of 107 basis points. Whilst 12 basis points lower than in the first half of 2009, the gross margin continued to improve from the second half 2009 level of 103 basis points. Net fee and commission income grew by 25% to CHF 492 million, in line with the increase in average assets under management, with investor confidence improving somewhat, albeit overall still conservative. Net interest income declined by 13% to CHF 245 million, as the impact of the decline in net interest margins more than offset the increase in deposit and loan volumes. Net trading income increased by 8% to CHF 163 million driven mainly by higher client-driven foreign exchange trading volumes. Other ordinary results improved to CHF 16 million.
Operating expenses went up by 12% year on year to CHF 594 million, mainly as a consequence of the acquisition of ING Bank. The total number of employees increased by 17% to 3,534, which includes 732 relationship managers, a net increase of 65 since the end of 2009. As a result of the expanded staff base, personnel expenses increased by 12% to CHF 400 million. General expenses, including valuation adjustments, provisions and losses, rose by 11% to CHF 167 million. As a consequence, the cost/income ratio was essentially unchanged at 63.4%, compared to 63.3% in the first half of 2009.
Accordingly, profit before taxes improved by 14% year on year to CHF 323 million, representing a pre-tax margin of 38 basis points. Income taxes increased to CHF 62 million, representing a tax rate of 19%. As a result, the net profit improved by CHF 19 million, or 8%, to CHF 261 million, and earnings per share came to CHF 1.27.
BIS tier 1 ratio at 22.8% – Balance sheet remains conservatively managed
The Group continued to manage its balance sheet conservatively and maintains a very solid capital base. Total assets have increased by 11% since the end of 2009 to CHF 47.4 billion, mainly as a result of the acquisition of ING Bank. Over the same period, client deposits went up by CHF 2.8 billion to CHF 30.1 billion, and lombard lending and mortgages increased by CHF 2.5 billion to CHF 12.9 billion, thus resulting in a continued conservative loan-to-deposit ratio of 0.43, underlining the sound liquidity situation of the Group. Total equity was up by 3% to CHF 4.3 billion, and BIS tier 1 capital grew by CHF 39 million to CHF 2.7 billion. With a strong BIS tier 1 ratio of 22.8% the Julius Baer Group continues to enjoy a very solid capital base.
The results conference will be webcast at 9:30 a.m. (CET). All documents (presentation, Business Review First Half 2010, Half-year Report 2010, and press release) will be available as of 7:15 a.m. (CET) at www.juliusbaer.com.
Media Relations: Tel. +41 (0) 58 888 8888
Investor Relations: Tel. +41 (0) 58 888 5256
12 November 2010:
Interim Management Statement
7 February 2011:
Release of 2010 Full-Year Results
7 April 2011:
Annual General Meeting
(1) Excluding integration and restructuring expenses of CHF 43 million (CHF 33 million net of tax) and the amortisation of intangible assets. Unadjusted for these items, the net profit attributable to shareholders decreased by 9% from CHF 203 million in the first half of 2009 to CHF 185 million in the first half of 2010.