Julius Bär Gruppe (BAER) Trading Update summary

Credit Portfolio Review and Risk Management

• Credit portfolio review is nearing completion, focusing on non-owner-occupied property loans in the double-digit millions, with no additional material idiosyncratic risks expected to emerge.

• Private debt loan book reduced by over 50% since end-2024, now below CHF 0.2 billion (0.4% of total loan book), with provisions spread across several clients and a CHF 130 million net charge.

• Enhanced risk governance includes a new Chief Risk Officer (Ivan Ivanic) and separation of risk, compliance, and legal functions to improve accountability and efficiency.

• Lending activities are being refocused on core wealth management clients, with revised credit policies and a more granular limit framework.

• Ongoing cooperation with regulators continues, with capital planning aligned to await completion of regulatory reviews.

Financial Performance and Client Activity

• Net new money inflows reached CHF 4.2 billion, mainly from Asia and Western Europe, despite ongoing de-risking and a stronger Swiss franc.

• Assets under management declined to CHF 467 billion, down 6% from year-end 2024, impacted by currency effects and the deconsolidation of Julius Baer Brazil.

• Gross margin improved to 87 basis points, driven by elevated client activity, with recurring and interest-driven components stable.

• Underlying cost-to-income ratio decreased to 66%, but adjusted ratio rose to 72% due to a CHF 130 million credit-related charge; cost savings of CHF 19 million already reflected.

• Interest-driven income is expected to remain within the upper bound of 22 basis points for the year, despite regional rate cuts.

Strategic Initiatives and Global Footprint

• Sale of Julius Baer Brazil completed, reducing AuM by CHF 8 billion but boosting CET1 capital ratio by 35 bp; Julius Baer continues to serve Brazilian clients internationally.

• Opened a new onshore branch in Milan to serve Italian high net worth clients, expanding European presence.

• Relationship manager hiring continues, with a net decrease due to Brazil sale and low-performer management, but a strong hiring pipeline is maintained.

• Strategic review process is underway, with a strategy update scheduled for June 3rd, 2025, to address ongoing activities and pressure points.

• Lending focus is shifting to clients with significant wealth managed by the firm, with strengthened credit governance and oversight.