At the Swiss-Brazilian private bank, capitalization is reaching almost astronomical heights following a successful year in 2023. This allows J. Safra Sarasin to engage in consolidation, says President Jürg Haller to finews.com.

The very discreet J. Safra Sarasin performed solidly in the challenging year of 2023. As the institution owned by the Safra dynasty of bankers announced on Wednesday, profit increased by 6.9 percent compared to the previous year, reaching 470.3 million Swiss francs.

This was achieved while the private bank managed to halt the negative trend in volume: assets under management increased to 204.3 billion Swiss francs by the end of the year, up from 197.9 billion Swiss francs at the end of 2022. Net new assets also increased compared to the previous year, amounting to 7.4 billion Swiss francs, as stated in the announcement.

Solidly on Track

«We are pleased with the performance,» says the bank’s chairman Jürg Haller (pictured below) to finews.com about the result. «The business environment has been challenging and the markets volatile. Nevertheless, the long-term customer focus and strict cost control have borne fruit.» Unlike competitors, the climbing interest rates proved to be a blessing for the bank, as they pushed up the interest margin and resulted in increased demand for the institution's range of offerings in the bond market.

The start to 2024 has also been successful, assures Haller. «We are solidly on track and feel comfortably positioned,» says the Swiss at the helm of the privately controlled banking group.

Strong Capital Base

(Image: J. Safra Sarasin)

Indeed, the group maintains a core capital ratio of 47 percent and core capital (CET1) of 5.7 billion Swiss francs – once again more than the previous year and significantly above the level required by the regulator. «Our strong capital base and high reserves put us in a favorable position to withstand market fluctuations and economic challenges while continuing to support the growth and stability of our business,» says Haller.

While strengthening the capital base aligns with the strategy of the owning family, it also ensures that the institution's «war chest» for potential acquisitions has rarely been more fully stocked. In the past, J. Safra Sarasin has actively participated in the consolidation of private banking. «The opportunity for acquisitions exists,» says the banker succinctly.

78 New Full-Time Positions

However, the institution grew organically last year. The group created 78 new full-time positions (compared to 100 the previous year) and now operates worldwide with around 2,500 employees. New branches were also opened in private banking in Baden and Paris. The new hires encompassed both the private client sector and the business with institutional clients.

Regarding the forced merger of UBS and CS, J. Safra Sarasin does not intend to actively poach advisors and clients from the two major banks, Haller explains. «However, if someone approaches us, we will consider it.»

In this regard, the coup from last June attracted attention. As finews.com reported, J. Safra Sarasin had then recruited an entire investment banking team from Credit Suisse (CS) for bond trading. A rather atypical move for a private bank – but the institution hopes to provide additional services to entrepreneurial families and their companies this way.

Offering Now Set to Be Expanded

«The team enhances our capabilities in the field of debt capital markets, with a focus on the issuance and underwriting of bonds in Swiss francs for issuers,» says Haller. The offering is now set to be expanded further into areas such as mergers and acquisitions (M&A).

However, deals always entail risks, as J. Safra Sarasin experienced with its private market investments for professional investors. According to a recent report by the German «Handelsblatt» (in German, article behind paywall), the bank participated in a financing round of the American online retailer Thrasio, which did not perform according to expectations.

Haller says that private market investments generally entail higher risks. However, such investments are only offered to sophisticated clients that are fully aware of the risks involved and size their positions accordingly. J. Safra Sarasin's more broadly accessible private market vehicles showed good performance in 2023, according to the Chairman.