The Zurich-based traditional bank Julius Baer seems to have found its way back to growth. For the first quarter of 2024, the institution reported a significant increase in assets under management and a substantial improvement in profitability.
Following last year's turbulence surrounding Austrian entrepreneur and investor René Benko, the financial community awaited Julius Baer's first-quarter 2024 figures with great anticipation. Evidently, the bank managed to regain ground in the first four months of the current year.
As the bank announced on Thursday, the first quarter of 2024 was marked by substantial growth in assets under management (AUM) and a significant recovery in client activity, which had hit a long-term low in the second half of 2023.
Rocky Start in January
However, the start was still rocky, according to Julius Baer. In the following three months, net inflows improved significantly. The considerable increase in client assets and an improved gross margin led to a marked increase in profitability compared to the second half of 2023, despite additional investments in growth.
The most notable aspect is the increase in AuM, which rose by 10 percent in the first quarter of 2024 to 471 billion Swiss francs ($515 billion). According to the bank, this increase is attributed to currency effects and developments in the equity markets, which were only partially offset by a decline in bond market valuations.
One Billion Inflows by April
Net new money inflows also recovered in the first quarter. January was still weak, but they then increased significantly to an annualized growth rate of 3 percent, resulting in total net inflows of 1 billion Swiss francs by the end of April 2024.
The positive impact of newly joined client advisors last year was evident. However, the overall result was dampened by the ongoing deleveraging (loans) by clients. The AuM also included 4.8 billion francs from Kairos, whose sale was completed after 30 April 2024. Kairos was de-consolidated as of 2 May 2024.
Improved Cost-/Income Ratio
The gross margin also developed positively, rising to nearly 89 basis points in the first four months of the current year. This is a significant improvement compared to the second half of 2023 (82 basis points).
Julius Baer made several investments, including hiring 35 client advisors. Nevertheless, the cost/income ratio improved to just over 69 percent compared to 73 percent in the second half of 2023. This improvement is mainly attributed to the strong increase in AuM and the improved gross margin, according to the communiqué.
The group's CET1 capital ratio increased to 15.3 percent (end of 2023: 14.6 percent), and the total capital ratio rose to 24.9 percent (end of 2023: 24.0 percent).
New CEO: Announcement Expected in June
The bank did not provide any information regarding the successor to CEO Philipp Rickenbacher. The search is in full swing and industry insiders expect an announcement in June.
