Julius Baer Group Ltd.’s profit jumped in the first half of 2023, aided by better-than-expected inflows of client funds amid the crisis surrounding local rival Credit Suisse.
Net income in the period rose 18% to 532 million Swiss francs ($614 million), the bank said in a statement Monday. Clients added 7.1 billion francs in new money, more than the 6.2 billion francs analysts had estimated.
“We have benefited from Credit-Suisse-UBS to some extent, but we’ve been able to generate new money from a much broader array of sources,” Chief Executive Officer Philipp Rickenbacher said in an interview with Bloomberg Television’s Manus Cranny.
Julius Baer is among Swiss wealth managers gaining from Credit Suisse’s demise, and the results indicate that inflows picked up in May and June as UBS Group AG completed the takeover. Julius Baer is also stepping up efforts in hiring, which analysts at Jefferies International Ltd. said was a “positive portent” for full year inflows.
Julius Baer added 57 relationship managers in the first half, and said it will continuing hiring through 2025. Rickenbacher said on a media call that the bank has added staff as a result of the turmoil at Credit Suisse, but it has also been able to hire more widely.
Organic Growth
Under Rickenbacher, the bank has been moving past a difficult period that saw an investigation into its Latin American business and impairments at its Italian fund unit Kairos. The bank wrote down the remaining goodwill of that business last year and has been in talks with potential suitors to sell it.
Asked about mergers & acquisition ambitions, Rickenbacher said that the bank’s growth plans for this cycle are very clearly geared toward building the existing businesses. “Julius Baer is looking at the market and at opportunities especially in our focus markets; but our plan A is organic growth”, he added.
To attract new clients, Baer has been ramping up its offerings outside public markets. It plans to raise $250 million for the largest fund yet under its flagship private equity program, according to marketing documents seen by Bloomberg, part of a push into alternative assets.
Julius Baer has also been offering crypto services, including so-called Lombard lending that allows some customers to borrow against digital assets held with the bank. It’s now expanding its crypto wealth management services in Dubai, marking the firm’s first major digital-assets push beyond the borders of its native Switzerland.
(adds quotes from CEO and details on hiring and M&A plans)