Julius Baer Profitability Under Pressure Despite Rising Managed Assets

By John Letzing

ZURICH--Julius Baer Group AG (BAER.EB) said on Thursday that the Swiss bank's managed assets rose 9% in the first ten months of this year, though low trading activity among its clients has recently undercut profitability.

Zurich-based Julius Baer said in an interim management statement that its assets under management rose by 27 billion Swiss francs ($26.9 billion) from the end of 2015 through October, thanks to net inflows and the acquisition of private banking operations including Commerzbank's Luxembourg unit.

Like its larger Swiss peers in wealth management, UBS Group AG (UBS) and Credit Suisse Group AG (CS), Julius Baer has been affected by its clients' unwillingness to put their assets to work in investments and trades amid relatively turbulent markets--which denies the banks of fees.

Overall client trading volume declined "markedly" during the four months from the end of June, Julius Baer said, which reduced the bank's gross margin.

Julius Baer said it has bulked up on relationship managers, or private bankers, during the year so far, with 115 recruited and 44 added through acquisitions--bringing the bank's total to 1,376. The bank said it expects its net new money growth to improve to between 4% and 6% next year, compared with roughly 4% this year on an annualized basis.

-Write to John Letzing at [e-mail]

(END) Dow Jones Newswires

November 17, 2016 02:07 ET (07:07 GMT)

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