Interim Management Statement for the first ten months of 2024 |
27.11.2024
| from Julius Bär & Co. AG
27.11.2024, Zurich - In the first ten months of 2024, Julius Baer realised substantial growth in assets under management (AuM), supported by accelerated net new money inflows since the end of June. The Group’s CET1 capital ratio improved to 16.7%, underlining the strong capital-generating nature of the Group’s business model. Julius Baer’s designated CEO Stefan Bollinger will start on 9 January 2025.
AuM grew by 12% to CHF 480 billion – Accelerated net inflows
In the first ten months of 2024, AuM rose to CHF 480 billion, a year-to-date increase of 12%. Total client assets reached a record high of CHF 570 billion. The increase in AuM was driven by strong stock markets as well as solid net inflows of CHF 11 billion. The positive currency impact experienced in the first half of the year was partly reversed over the past four months.
Compared to the first half of 2024 (H1 2024), when net inflows were at CHF 3.7 billion (1.7% annualised), net new money in the July–October 2024 period accelerated to CHF 7.5 billion (4.8% annualised). The latter result included a large single transactional inflow of which the majority left in November. Excluding this transaction, the July–October inflow pace was 4.2%.
Net new money flowed in predominantly from clients domiciled in strategic key markets in Europe (especially the UK and Germany), Asia (particularly Singapore and India), and the Middle East (especially the UAE). The impact of client deleveraging diminished meaningfully compared to previous years.
In the first ten months of 2024, the number of relationship managers grew by 46 full-time equivalents (FTEs) to 1,389.
Gross margin 83 basis points
In the first ten months of 2024, the gross margin decreased to 83 basis points (bp), compared to the 88 bp underlying** gross margin for full year 2023 (FY 2023).
In the July–October 2024 period, the gross margin was 81 bp, a decline from the 85 bp reported for H1 2024, but similar to the level in May–June 2024 (excluding the loss related to the sale of Kairos in May 2024):
The gross margin contribution from recurring income (within net commission and fee income) declined slightly to 37 bp (H1 2024: 38 bp), partly due to the full four-month impact of the deconsolidation of Kairos in May 2024. Interest-driven income contributed 23 bp (H1 2024: 24 bp) to the gross margin, of which 7 bp (H1 2024: 10 bp) from net interest income, and 16 bp (H1 2024: 14 bp) from treasury swap income (within net income from financial instruments at FVTPL***). Activity-driven income added 21 bp (H1 2024: 24 bp) to the gross margin, of which 10 bp (H1 2024: 10 bp) from the non-recurring revenues within net commission and fee income, and 11 bp (H1 2024: 14 bp) from the revenues not related to treasury swap income within net income from financial instruments measured at FVTPL. Following a seasonally slower third quarter, activity-driven income improved again in October. Cost/income ratio 71%, pre-tax margin 24 bp
The adjusted cost/income ratio remained at 71%, compared to 69% (underlying) in FY 2023, and the adjusted pre-tax margin at 24 bp compared to 26 bp (underlying) in FY 2023.
Strongly capitalised
In Switzerland, the final Basel 3 standard (B3F) will be implemented with effect from 1 January 2025. In the first ten months of 2024, on the basis of the currently applicable standard, the Group’s CET1 capital ratio strengthened to 16.7% (end 2023: 14.6%) and the total capital ratio rose to 24.7% (end 2023: 24.0%). This development was reinforced by the further benefit of the ‘pull-to-par’ reversal of the decline (back in 2021 and 2022) in the value of bonds held in the Group’s treasury portfolio (financial assets measured at FVOCI****), as well as a further reduction in the private debt loan book to just above CHF 0.4 billion (end 2023: CHF 0.8 billion; end June 2024: CHF 0.6 billion), at 100% credit risk weighting.
At these levels, the Group’s CET1 and total capital ratios remain well above the Group’s own floors of 11% and 15% respectively, and significantly in excess of the regulatory requirements of 8.3% and 12.5% respectively.
Following the redemption of the AT1 bonds issued in 2017 (USD 300 million aggregate nominal amount) in September 2024, the Group’s tier 1 leverage ratio stood at 4.8% (end 2023: 4.9%), substantially above the regulatory requirement of 3.0%.
The Group currently expects that IFRS net profit for the full year 2024 will significantly exceed the one achieved in FY 2023.
New CEO Stefan Bollinger to start on 9 January 2025
As announced in July 2024, the Board of Directors has appointed Stefan Bollinger as Chief Executive Officer. The Group can now confirm that Stefan Bollinger will join Julius Baer on 9 January 2025.
--- END press release Interim Management Statement for the first ten months of 2024 ---
In the first ten months of 2024, AuM rose to CHF 480 billion, a year-to-date increase of 12%. Total client assets reached a record high of CHF 570 billion. The increase in AuM was driven by strong stock markets as well as solid net inflows of CHF 11 billion. The positive currency impact experienced in the first half of the year was partly reversed over the past four months.
Compared to the first half of 2024 (H1 2024), when net inflows were at CHF 3.7 billion (1.7% annualised), net new money in the July–October 2024 period accelerated to CHF 7.5 billion (4.8% annualised). The latter result included a large single transactional inflow of which the majority left in November. Excluding this transaction, the July–October inflow pace was 4.2%.
Net new money flowed in predominantly from clients domiciled in strategic key markets in Europe (especially the UK and Germany), Asia (particularly Singapore and India), and the Middle East (especially the UAE). The impact of client deleveraging diminished meaningfully compared to previous years.
In the first ten months of 2024, the number of relationship managers grew by 46 full-time equivalents (FTEs) to 1,389.
Gross margin 83 basis points
In the first ten months of 2024, the gross margin decreased to 83 basis points (bp), compared to the 88 bp underlying** gross margin for full year 2023 (FY 2023).
In the July–October 2024 period, the gross margin was 81 bp, a decline from the 85 bp reported for H1 2024, but similar to the level in May–June 2024 (excluding the loss related to the sale of Kairos in May 2024):
The gross margin contribution from recurring income (within net commission and fee income) declined slightly to 37 bp (H1 2024: 38 bp), partly due to the full four-month impact of the deconsolidation of Kairos in May 2024. Interest-driven income contributed 23 bp (H1 2024: 24 bp) to the gross margin, of which 7 bp (H1 2024: 10 bp) from net interest income, and 16 bp (H1 2024: 14 bp) from treasury swap income (within net income from financial instruments at FVTPL***). Activity-driven income added 21 bp (H1 2024: 24 bp) to the gross margin, of which 10 bp (H1 2024: 10 bp) from the non-recurring revenues within net commission and fee income, and 11 bp (H1 2024: 14 bp) from the revenues not related to treasury swap income within net income from financial instruments measured at FVTPL. Following a seasonally slower third quarter, activity-driven income improved again in October. Cost/income ratio 71%, pre-tax margin 24 bp
The adjusted cost/income ratio remained at 71%, compared to 69% (underlying) in FY 2023, and the adjusted pre-tax margin at 24 bp compared to 26 bp (underlying) in FY 2023.
Strongly capitalised
In Switzerland, the final Basel 3 standard (B3F) will be implemented with effect from 1 January 2025. In the first ten months of 2024, on the basis of the currently applicable standard, the Group’s CET1 capital ratio strengthened to 16.7% (end 2023: 14.6%) and the total capital ratio rose to 24.7% (end 2023: 24.0%). This development was reinforced by the further benefit of the ‘pull-to-par’ reversal of the decline (back in 2021 and 2022) in the value of bonds held in the Group’s treasury portfolio (financial assets measured at FVOCI****), as well as a further reduction in the private debt loan book to just above CHF 0.4 billion (end 2023: CHF 0.8 billion; end June 2024: CHF 0.6 billion), at 100% credit risk weighting.
At these levels, the Group’s CET1 and total capital ratios remain well above the Group’s own floors of 11% and 15% respectively, and significantly in excess of the regulatory requirements of 8.3% and 12.5% respectively.
Following the redemption of the AT1 bonds issued in 2017 (USD 300 million aggregate nominal amount) in September 2024, the Group’s tier 1 leverage ratio stood at 4.8% (end 2023: 4.9%), substantially above the regulatory requirement of 3.0%.
The Group currently expects that IFRS net profit for the full year 2024 will significantly exceed the one achieved in FY 2023.
New CEO Stefan Bollinger to start on 9 January 2025
As announced in July 2024, the Board of Directors has appointed Stefan Bollinger as Chief Executive Officer. The Group can now confirm that Stefan Bollinger will join Julius Baer on 9 January 2025.
Contact:
Gilles Stuck
communications@juliusbaer.com
Phone: +41 58 888 11 11
Phone Media : +41 58 888 88 88
--- END press release Interim Management Statement for the first ten months of 2024 ---
Source:
More information and links:
Interim Management Statement für die ersten zehn Monate 2024 (news article in german on swiss-press.com)
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