Julius Baer benefited from a boom in trading as well as structured products by wealthy clients during the onset of the pandemic.
The Swiss-based bank's profit in the first half surged 43 percent to 491 million Swiss francs ($523 million), it said in a statement on Monday. Commissions rose eight percent, but income from trading and derivatives surged 70 percent.
«The changing market environment, including sharply higher market volatility, drove a strong increase in client activity in foreign exchange, derivatives, and precious metals trading as well as higher income from structured products,» it said. This more than offset a drop in interest income, while spending was largely unchanged on the year.
Savings Plans
Led by CEO Philipp Rickenbacher since September, the 130-year-old private bank had concluded a round of job cuts shortly before the coronavirus spread to Europe and the U.S., as part of a $207 million savings drive.
Julius Baer declined to provide a specific outlook, saying the full economic impact of Covid-19 is still ahead but said it is confident of being «well prepared» for the second half of 2020. We are well-positioned to maintain the stability of our business and reap opportunities when they arise,» it said, without elaborating.
Latin America Reversal
In the six months, Julius Baer's private bankers hoovered up 5 billion francs in net new money – including a reversal of outflows in its trouble Latin America business. The region has been at the center of recent troubles, and Julius Baer exited several markets like Venezuela where it got into trouble.
The private bank is grappling with the side effects of an era of heady growth, including several probes into its handling of money laundering attempts. Rickenbacher is steering Julius Baer's more than 1,400 private bankers away from growth-at-all-costs targets, as finews.com reported.
Its overall assets slid six percent to 402 billion francs despite the 2.3 percent growth in net new money: the drop in financial markets, as well as the strengthening Swiss franc, wiped out the new funds won by its private bankers.
