Following a challenging first half, Julius Baer saw improvements across the board including in net asset inflows and gross margins.

Since the end of June, Julius Baer recorded net new money of 4.1 billion Swiss francs ($4.3 billion), according to a statement, marking a 3 billion franc net inflow year-to-date and offsetting 1.1 billion francs of outflows in the first half of 2022. 

Overall, the bank registered assets under management of 429 billion francs, as of October 31, down 11 percent compared to end-2021. This was due to global market declines (minus 67 billion francs), minor corporate divestments (minus 7 billion francs) and reclassified assets from Russia-linked sanctions (minus 1 billion francs) which was offset by the net inflows and positive currency impact (plus 19 billion francs).

Rising Rates Boost Margins

Julius Baer also saw improvements in gross margins due to rising interest rates.

Gross margins for the first ten months of 2022 reached 85 basis points, up 3 basis points compared to the full year of 2021. This was driven by a strong performance of nearly 91 basis points in the July-October period due to the impact of higher rates and more than offset lower client activity which continued to normalize from the lows during the May-June period. 

Targets Within Reach

According to the bank, targets set for its 2020-2022 strategic cycle remain within reach. This includes the aim of achieving a cost-income ratio of under 67 percent and adjusted pre-tax margins of 25-28 basis points.

Year-to-date, Julius Baer recorded a cost-income ratio of just above 66 percent, up from 64 percent in 2021, and an adjusted pre-tax margin that is marginally below 26 basis points, compared to 28 basis points in 2021. 

«With the year-to-date gross margin improvement as well as the benefits materializing from the revenue, productivity and efficiency measures implemented in the first two years of the strategic cycle, achieving these targets remains well within reach – despite the year-to-date decline in client assets,» the bank said.