Julius Baer said its first-half profit edged lower as spending, including for new recruits, rose. The Swiss private bank hired a Goldman Sachs veteran for its Latin American business.
Zurich-based Julius Baer said its six-month profit stood at 357 million Swiss francs, which is 2 percent off last year, which had recorded several benefits including the release of a pension fund charge.
More notably, the private bank said it took in over 10 billion Swiss francs in net new funds from clients, a key bellwether of future business. This translates to a healthy 6.1 percent growth in existing assets, above the bank's 4 percent to 6 percent target.
Gross Margin Slip
Julius Baer said its operating income rose 12 percent, as the acquisition of Kairos in Italy kicked in. The revenue climb is less than the average rise of assets, leading the bank's key gross margin measure to slip three basis points.
By contrast, the bank's spending rose 10 percent, when adjusted for last year's pension fund release. Part of the reason is obvious in the bank's headcount, which rose on the year by 349 employees.
Regional Succession
Julius Baer also unveiled a prominent solution to a long-standing succession problem. The bank said that it has hired Beatriz Sanchez from U.S. bank Goldman Sachs to run its business with Latin American's wealthy.
A prominent wealth executive in Latin American, she replaces Gustavo Raitzin, whom the bank had been seeking replacement for since late last year. Sanchez will join in October and take over from Raitzin, who will chairman of Latin American following his retirement, in December.
