Julius Bär Gruppe (BAER) H2 2025 earnings summary

Executive summary

• Achieved record assets under management (AUM) of CHF 521 billion, up 5% year-on-year, with net new money of CHF 14.4 billion, driven by strong inflows from Asia, Western Europe, and the Middle East, despite ongoing de-risking and divestments.

• Underlying pre-tax profit rose 17% year-on-year, reflecting a 6% increase in operating income and cost discipline, while IFRS net profit declined 25% to CHF 764 million due to higher credit losses and one-off items, including the sale of the Brazilian business.

• Transformation year with new strategy, organizational simplification, strengthened governance, and risk frameworks, including a renewed leadership team.

• Addressed legacy credit issues, completed a comprehensive credit review, and implemented a revised risk setup.

• Positive execution momentum for 2026-28 targets, focusing on profitable growth, operational efficiency, and technology-driven change.

Financial highlights

• Underlying operating income increased 6% year-on-year to CHF 4,073 million, while adjusted operating expenses rose 1%.

• Net commission and fee income grew 5% to CHF 2,314 million; net income from financial instruments at FVTPL up 25% to CHF 1,608 million.

• Net interest income dropped by CHF 252 million to CHF 125 million, mainly due to lower rates and weaker USD.

• Net credit losses surged to CHF 213 million, primarily from mortgage and private debt loan books.

• Underlying cost/income ratio improved to 67.6% from 70.9% year-over-year.

Outlook and guidance

• Mid-term targets reconfirmed: net new money growth of 4-5% per annum by 2028, adjusted cost/income ratio below 67%, and return on CET1 capital above 30%.

• Dividend proposal remains unchanged at CHF 2.60 per share, with additional buybacks subject to regulatory approval.

• Transformation focuses on balancing growth, cost, and risk, with technology and cultural change as enablers.

• Expected adjusted tax rate for 2026-2028: 18-20%.