EQS-Adhoc: Interim Management Statement for the first ten months of 2021 *
EQS Group-Ad-hoc: Julius Baer Group Ltd. / Keyword (s): Interim report
Interim management statement for the first ten months of 2021 *
22-Nov-2021 / 07:00 CET / CEST
Publication of an ad hoc announcement in accordance with art. 53 LR
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Ad hoc announcement in accordance with art. 53 LR
Sustained improvement in the contribution to the gross margin of recurring commission income – Seasonal slowdown in customer activity – Solid net inflows – Financial situation remains solid – Return on capital remains among the highest in the sector
Zurich, November 22, 2021 – Julius Baer’s profitability increased significantly in the first ten months of 2021 thanks to strong growth in customer assets and substantial improvements in cost efficiency, complemented by a near -no credit losses. While the execution of the share buyback program continued uninterrupted, Julius Baer’s capital position remained solid. At the same time, the CET1 return on capital is well above target and continues to be among the highest in the industry. On the basis of these results, Julius Baer is in an excellent position to meet the medium-term financial objectives set in early 2020.
Strong growth in assets under management
Assets under management (AuM) reached CHF 484 billion at the end of October 2021, an increase of 12% since the start of the year. The increase is due to the continued net inflows of new money (4.4% annualized) as well as the positive performance of the stock markets and currency fluctuations. The strengthening since the start of the year of a number of key currencies, in particular the US dollar, against the Swiss franc has only been partially offset by a weaker euro.
Solid gross margin development
The gross margin for the first ten months of 2021 is slightly above 82 basis points (bps). The decrease from 88 basis points recorded for full year 2020 reflects a slowdown in customer activity from the exceptionally high levels seen last year. While the contribution to the gross margin from net interest income was slightly lower than in 2020, the contribution from recurring commission income improved.
The slowdown in customer activity from the strong first quarter 2021 continued from the second through the third quarter and into October. The first results for November, however, indicate a potential recovery for the last two months of the year. Consequently, over the period from July to October, the contribution to the gross margin of brokerage commissions and the net result of financial instruments decreased compared to the level observed in the first half of 2021. The contribution of recurring commissions to the gross margin is stable between these two periods, as well as the contribution of net interest income. Credit quality remained high and there was no loss of net worth over the period July-October 2021 (after the CHF 1 million recorded for the first six months of 2021).
Further improvement in profitability
The change in expenses since the start of the year has benefited from the effects of measures taken as part of the CHF 200 million gross cost reduction program announced in February 2020. Consequently, the adjusted cost / income ratio for first ten months of 2021 improved to just over 63% (66% in full year 2020) and the pre-tax margin adjusted to 29bp (27bp in full year 2020).
Strong capital position
On March 2, 2021, Julius Baer launched a new 12-month program to buy back up to CHF 450 million in purchase value of Julius Baer Group SA shares. By the end of October, a total of 4,832,000 shares had been repurchased at a total cost of CHF 294 million, which represents a significant increase from the CHF 77 million repurchased in 2020.
Despite the substantial increase in share buybacks and the increase in accumulated dividends to reflect the significant growth in profitability, the Group’s BIS CET1 capital ratio increased to 16.7% at the end of October 2021 (end of 2020: 14.9%). At the same time, and in part thanks to the successful issuance in September 2021 of a new AT1 bond of 320 million USD (at a record coupon for a European AT1 issuer in USD), the BIS total capital ratio rose to 24.1%. (end of 2020: 21.0%). At these levels, the BIS CET1 ratio and the BIS total capital ratio remained well above the Group’s own lows of 11% and 15% respectively, and well above the regulatory requirements of 7.9% and 12.1%. respectively.
Even with these high capitalization levels, the adjusted CET1 return on capital remained well above the 2022 target of> 30% and among the highest in the industry.
*) Based on unaudited management accounts. This press release contains certain financial measures that are not defined or specified by IFRS, the definitions of which are provided in the Alternative Performance Measures document available at www.juliusbaer.com/APM.
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February 2, 2022: Publication and presentation of the 2021 annual results, Zurich
March 21, 2022: Publication of the 2021 Annual Report including the 2021 Remuneration Report
March 21, 2022: Publication of the Corporate Sustainability Report 2021
April 12, 2022: Annual General Meeting, Zurich
About Julius Baer
Julius Baer is the leading Swiss wealth management group and a premium brand in this global sector, with a focus on serving and advising sophisticated private clients. In everything we do, we are inspired by our goal: to create value beyond wealth. At the end of October 2021, assets under management amounted to CHF 484 billion. Bank Julius Baer & Co. AG, the famous Swiss private bank with origins dating back to 1890, is the main operating company of the Julius Baer AG Group, whose shares are listed on the SIX Swiss Exchange (ticker symbol: BAER) and are included in the Swiss Leader Index (SLI), made up of the 30 largest and most liquid Swiss stocks.
Julius Baer is present in more than 25 countries and more than 60 locations. Based in Zurich, we have offices in key locations including Dubai, Frankfurt, Geneva, Hong Kong, London, Luxembourg, Mexico City, Milan, Monaco, Montevideo, Moscow, Mumbai, São Paulo, Singapore and Tokyo. Our customer-centric approach, our objective advice based on the Julius Baer open product platform, our strong financial base and our entrepreneurial management culture make us the international benchmark in wealth management.
For more information, visit our website at www.juliusbaer.com
Caution regarding forward-looking statements
This press release from Julius Baer Group Ltd. (“The Company”) includes forward-looking statements that reflect the Company’s intentions, beliefs or current expectations and projections regarding the Company’s future operating results, financial condition, liquidity, performance, prospects, its strategies, the opportunities and the industries in which it operates. Forward-looking statements relate to all matters which are not historical facts. The Company has attempted to identify these forward-looking statements by using the words “may”, “will”, “should”, “should”, “expect”, “intend”, “estimate”, “anticipate”. ‘,’ Plan ‘,’ believe ‘,’ seek ‘,’ plan ‘,’ predict ‘,’ continue ‘and similar expressions. Such statements are made on the basis of assumptions and expectations which, although the Company believes them to be reasonable at this time, may prove to be incorrect.
These forward-looking statements are subject to risks, uncertainties and assumptions and other factors that could affect the results of operations, financial condition, liquidity, performance, prospects or actual opportunities of the Company, as well than those in the markets it serves or intends to serve. , differ materially from those expressed or suggested by these forward-looking statements. Important factors that could cause these differences include, but are not limited to: changes in business or other market conditions, legislative, fiscal and regulatory developments, general economic conditions in Switzerland, in the European Union and elsewhere, and the Company’s ability to respond to trends in the financial services industry. Additional factors could cause material differences between actual results, performance or achievements. In view of these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements. The Company and its subsidiaries, and their directors, officers, employees and advisers expressly disclaim any obligation or commitment to publish any update or revision of any forward-looking statement in this press release and any change in the expectations of the Company or any change in the events, conditions or circumstances on which these forward-looking statements are based, except as required by applicable law or regulation.
End of ad hoc announcement