Julius Baer introduces positive financial results for full 2008. The bank achieved a 2008 net profit of CHF 852 million and significant inflows in Private Banking (CHF +17 billion).
Benefiting from its exclusive focus on wealth management, Julius Baer’s 2008 net profit decreased by only one quarter to CHF 852 million compared to the peak year 2007. Total client assets amounted to CHF 338 billion.
The Group’s assets under management declined by one third to CHF 275 billion at the end of 2008. Assets under custody amounted to CHF 63 billion.
Net new money in Bank Julius Baer was CHF 22 billion, with Private Banking contributing a record CHF 17 billion. Net outflows in Asset Management amounted to CHF 27 billion as the asset management industry faced a particularly challenging environment.
The Julius Baer Group possesses a stable balance sheet with low leverage and a very strong capital base as expressed by its BIS Tier 1 ratio of 13.6% at year-end.
Based on this result and the strong capital base, the Board of Directors proposes to the Ordinary Annual General Meeting on 8 April 2009 an unchanged dividend of CHF 0.50 per registered share.
Total client assets of the Julius Baer Group amounted to CHF 338 billion at the end of 2008. Assets under management totalled CHF 275 billion, down 32% from CHF 405 billion at the end of 2007. Group operating income fell by 15% to CHF 2,939 million compared to 2007.
Group operating expenses declined by 7% to CHF 1,857 million, partly helped by the strengthening of the Swiss franc. Despite the overall increase of staff by 6% to 4,335, personnel expenses were cut by 9% to CHF 1,276 million on the back of lowered performance-related compensation.
In 2008, Julius Baer bought back 4,403,500 own shares in the amount of CHF 299 million. The share buyback programme 2008-2010 of up to CHF 2 billion as announced in 2007 will be continued, taking account of the targeted BIS Tier 1 ratio of 12% as well as the market environment.
As of the end of 2008, the business activities of the former Investment Products division were realigned as follows: (a) private client discretionary and advisory business as well as all research, trust and tax functions providing private banking services and products remain within Bank Julius Baer to better serve private clients, while (b) Julius Baer Asset Management Europe, comprising all Julius Baer branded investment fund and institutional mandate businesses, has been transferred to the Asset Management segment.
Bank Julius Baer’s operating income decreased by only a modest 2% to CHF 1,678 million in the reporting period. Despite reduced performance-related compensation, operating expenses increased by 4% to CHF 1,049 million as a result of front-related hirings (increasing the number of employees by 7% to 3,009) and slightly higher general expenses.
L.D.