Bank Julius Baer announced new targets for 2023 to 2025. It also gives results for the first four months of 2022, which saw a drop in assets under management. 

Swiss Julius Baer is looking to return more capital to its shareholders, targeting an adjusted return on common equity tier 1 capital (CET1) of «at least» 30 percent during its medium-term time frame running from 2023 through 2025, the private bank announced Thursday.

It said it updated the capital distribution policy with «a clear commitment» to return capital exceeding a CET1 capital ratio of 14 percent through annual share repurchases, in addition to the 50 percent dividend payout ratio.

Pure Wealth Management

The bank said it would focus on sustainable profit growth and the «development of a pure wealth management business model.»

It will focus on improving earning quality by increasing its ability to improve recurring revenues, including increasing its wealth management mandate by offering a strong value proposition to complement its advisory solutions. 

«We are embarking on a new phase of profitable growth, building on the transformation we have successfully pursued since 2020. Our unique client-centric business model with a dedicated focus on high net worth and ultra-high net worth clients gives us strong competitiveness to shape our future. Building on this strength, we will consolidate our position as the leading international wealth manager by the end of the decade. To do so, we will grow business volumes and profitability, improve earnings quality and evolve the way we do business», said CEO Philipp Rickenbacher.

Assets Under Management

For the first four months of the year, Julius Baer reported assets under management of 457 billion Swiss francs ($460 billion), which was a decline of 5 percent from the end of last year.

It said the decline was the result of negative market developments, business divestments, and deleveraging by clients. Those factors were partly offset by a positive currency effect due in particular to the dollar appreciation against the Swiss franc.

«The negative market development was caused by significant declines in equity and bond markets due to uncertainties related to the start of the war in Ukraine, further Covid-related restrictions in China, and the significant increase in inflation and interest rates that has already occurred and is expected in the future», the bank said.

Cost Management

The bank aims to save 120 million Swiss francs on a gross basis by 2025, by streamlining its geographic footprint and market coverage.

Medium-Term Targets (2023-2025)

  • Adjusted cost/income ratio of below 64 percent by 2025
  • Adjusted pre-tax margin of 28 to 31 basis points by 2025
  • Over 10 percent annual growth in adjusted pre-tax profit during the 2023-2025 cycle
  • Adjusted return on BIS CET1 capital of at least 30 percent during the 2023-2025 cycle

The strategy will be supported by a binding sustainability strategy and strong risk management, the statement said.

More to follow