The Swiss wealth manager's assets held steady at the ten-month mark, while margins eased amid a slowdown in client trading.
Zurich-based Julius Baer's assets under management stood virtually unchanged at the end of October at 486 billion Swiss francs ($523 billion) compared to mid-year, the Swiss bank said in a statement on Monday required by securities disclosure law.
It flagged a slowing in clients' desire for financial activity that spilled from the second and third quarter into October, contrasting with last year’s progress when the private bank was hailed as one of the fastest to recover from the effects of the coronavirus pandemic.
Cost Efficiency
The slow down hit the wealth manager's gross margin as well, which softened to 82 basis points, from 88 points in 2020. Julius Baer said the contribution from net interest income edged lower, but it is earning higher margins on recurring fee income – seen as more desirable by money managers.
The bank said «initial results for November, however, indicate a potential recovery for the final two months of the year.» The cost cutting program announced in February last year has led to an improved cost/income ratio in the first ten months of 63 percent, down from 66 percent last year.
Series of Scandals
Following the launch of its share buy-back in March, by the end of October, a total of 4,832,000 shares had been repurchased for a total amount of 294 million francs. This represents a significant increase from the 77 million francs repurchased in 2020, it said.
This year the Swiss wealth manager continued efforts to recover from a series of scandals of recent years. In May it settled with U.S. prosecutors over charges that the bank laundered money from FIFA bribes. Currently the bank is under supervision by the Finma and under obligation to sieve through its processes involving its approach to its clients, business, management, governance.
