Julius Bär Gruppe (BAER) H2 2024 (Media) earnings summary

Executive summary

• CEO outlined five immediate priorities, including enduring client focus and disciplined entrepreneurship, to address both top and bottom line challenges, with a resized Executive Board and a comprehensive strategy review to be communicated before summer.

• Achieved record assets under management (AuM) of CHF 497bn, up 16% year-over-year, with total client assets reaching CHF 590bn, up 15%.

• Net new money (NNM) generation accelerated to CHF 14.2bn, driven by strong inflows in key markets and successful relationship manager hiring.

• Adjusted net profit rose 11% to CHF 1,047m, supported by a substantial tax provision release and improved client activity.

• Ongoing cost program extended, emphasizing cost consciousness and operational discipline, with a CHF 250m run-rate savings target and additional measures to streamline operations.

Financial highlights

• Operating income increased 1% to CHF 3,861m, with net commission and fee income up 14% to CHF 2,204m and net income from financial instruments at FVTPL up 21% to CHF 1,282m.

• Net interest income declined 55% to CHF 377m due to higher interest expense and lower loan volumes.

• Net new money for the year was CHF 14.2 billion, with a net releveraging of CHF 200 million.

• Profit doubled year-over-year, but the dividend remains at CHF 2.60 per share, following a progressive dividend policy.

• Adjusted operating expenses rose 3% to CHF 2,782m, mainly from higher personnel costs and IT investments.

Outlook and guidance

• Net new money growth expected to be muted in 2024, closer to 3% due to a stricter risk management framework, with optimism for midterm improvement.

• Targeted recurring income margin by 2025 is 39-40 basis points.

• Adjusted tax rate guidance for 2025-27 is 18-20%, up from the exceptionally low 2.9% in 2024.

• Basel 3 Final implementation expected to reduce CET1 capital ratio by ~350bp as of January 2025.

• More details on growth initiatives and strategy to be shared at an Investor Day before the summer.