Julius Bär Gruppe (BAER) Trading Update summary

Credit Review and Risk Management

• Completed a comprehensive credit review, resulting in CHF 149 million in additional loan loss allowances for legacy real estate loans originated before 2023, marking the end of legacy credit issues and managing down CHF 0.7 billion in non-core real estate loans.

• The allowances align with the revised risk appetite and strategy shift announced in June, and the credit book was benchmarked against the new risk framework.

• Lombard and traditional residential mortgage portfolios are resilient, well-collateralised, and the remaining mortgage book is largely residential, owner-occupied, with an LTV below 50%.

• Upgrades to the risk organisation included key senior appointments, with a new Chief Compliance Officer joining by February 2026, further strengthening governance.

Operating Performance and Financials

• Achieved record assets under management of CHF 520 billion by October 2025, driven by CHF 12 billion net client inflows and rising stock markets, despite a stronger Swiss franc and the sale of Julius Baer Brazil.

• Gross margin remained stable at 83 basis points for the first ten months of 2025, and the cost-to-income ratio improved to 66%, reflecting disciplined cost management and efficiency gains.

• Revenue growth was supported by stable gross margins and improved pre-tax margin, with cost savings expected to exceed targets by CHF 20 million and the efficiency program on track to deliver CHF 130 million in gross savings by year-end.

• CET1 capital ratio increased to 16.3% at the end of October, up 210 basis points since the start of the year, and total capital ratio reached 22.9%, both well above regulatory requirements.

• Tier 1 leverage ratio remained at 4.9%, exceeding the 3.0% regulatory minimum, and operational RWA related to a 2015 loss will roll off by year-end 2024, expected to add over 100 basis points to CET1.

Guidance and Outlook

• Net new money growth for 2025 is expected to be around 2.8%, slightly below the 3% guidance, with a target to reach 4%-5% by 2028.

• IFRS net profit for 2025 is expected to be lower than 2024 due to non-recurring items, but underlying profitability and capital generation remain strong.

• Cost-to-income ratio for 2025 is guided to be below 69% on an underlying basis, with further improvements targeted in subsequent years.

• Transformation and investment costs are expected to be front-loaded, with the biggest steps in cost efficiency and payoff in 2026 and 2027.

• Share buyback discussions with FINMA will not commence before the end of February, pending completion of internal milestones.