Julius Baer: Presentation of the consolidated 2009 half-year results

Monday, 27. July 2009 07:00
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Presentation of the consolidated 2009 half-year results* - including
pro forma financial figures for the future Julius Baer Group Ltd. and
the future GAM Holding Ltd. Additional information on strategy,
management, financial targets and segment reporting structure of
these companies will be presented on 24 September 2009.

Total client assets at CHF 367 billion - Assets under management up
by 9% to CHF 299 billion - Net new money inflows healthy in Private
Banking, marked improvement in Asset Management - Net profit
decreases to CHF 324 million year on year - Expenses down by 12%, in
line with target - BIS Tier 1 ratio at 16.7%

With average assets under management 25% lower year on year,
operating income declined by 24%. Operating expenses were managed
down by 12%, resulting in adjusted consolidated net profit decreasing
by 37% to CHF 324 million in the first half of 2009 compared to a
year ago. All businesses continued to show a positive contribution.

Compared to year-end 2008, amid stabilising financial markets and a
weaker Swiss franc, consolidated assets under management increased by
9% to CHF 299 billion. Including assets under custody of CHF 68
billion, total client assets amounted to CHF 367 billion.

Continued conservative risk and balance sheet management resulted in
the BIS Tier 1 ratio further improving to 16.7%.

The future Julius Baer Group Ltd.** (private banking, excluding the
Private Label Funds business) attracted net new private client assets
of CHF 4 billion or 6% annualised, positively contributing to the 12%
growth in assets under management to CHF 142 billion compared to
year-end 2008.

The future GAM Holding Ltd.** (asset management, including the
Private Label Funds business) significantly improved asset flows
compared to the second half of 2008, with net outflows slowing to CHF
0.5 billion while total assets under management rose by 6% in the
first half of 2009 to CHF 156 billion compared to year-end 2008.

Having been approved by the Extraordinary General Meeting on 30 June
2009, the separation of the private banking and asset management
businesses is on track to be completed by the end of the third
quarter of 2009 but remains subject to regulatory approvals.

Total consolidated client assets amounted to CHF 367 billion at the
end of June 2009. Assets under management totalled CHF 299 billion,
up by 9% from CHF 275 billion at year-end 2008. This increase of CHF
24 billion reflects net new money inflows of CHF 3.4 billion, the
recovery of most investment categories in the second quarter, adding
CHF 12 billion, a positive currency impact of CHF 7 billion and the
acquisition of Augustus Asset Managers Ltd., which contributed
CHF 1.9 billion. In addition, assets under custody were up by 7% to
CHF 68 billion.

Consolidated operating income fell by 24% to CHF 1,224 million year
on year primarily as a result of 25% lower average assets under
management year on year. Net fee and commission income declined by
34% to CHF 791 million, due to the lower average asset levels, the
changing asset mix and clients' continued strong preference for
liquidity and reluctance to engage in market-related activity. Net
interest income rose by 27% to CHF 281 million thanks to higher
average deposit levels as well as higher interest margins, and
despite a slight decrease in lending to private clients. With foreign
exchange trading income rising slightly and on the back of lower net
income from equity trading, net trading income decreased by 7% to
CHF 165 million.

Consolidated operating expenses declined by 12% to CHF 832 million
year on year as a result of efforts to actively manage down the
Group's cost base. While the total number of employees declined by 2%
to 4,255, personnel expenses fell by 13% to CHF 587 million as a
result of a renewed lowering of performance-related compensation
accruals. General expenses, including valuation adjustments,
provisions and losses, were down by 15% to CHF 216 million, primarily
on the back of lower expenses for IT and marketing. Nevertheless, and
as a consequence of operating income declining faster than operating
expenses, the consolidated cost/income ratio increased to 67.0% for
the first half of 2009 from 58.5% a year ago.

Consolidated profit before taxes declined by 40% to CHF 391 million
year on year. Taxes amounted to CHF 68 million, representing a lower
effective tax rate of 17% versus 22% for the first half of 2008.
Adjusted consolidated net profit was therefore down by 37% to CHF 324
million. EPS showed a smaller decline of 36% to CHF 1.56 due to the
lower share count following last year's buyback. The share buyback
programme was terminated as part of the proposed separation that was
approved by the Extraordinary General Meeting on 30 June 2009.

Balance sheet remains solid - BIS Tier 1 ratio at 16.7%

Consolidated total balance sheet assets showed virtually no change at
mid-year, amounting to CHF 46.0 billion. Client deposits went up by
CHF 2.1 billion to CHF 27.4 billion, again reflecting clients'
defensive investment stance as well as positive currency translation
effects. Lombard lending and mortgages granted to clients (as part of
the line item 'loans to customers') declined slightly year on year,
resulting in a continued conservative loan-to-deposit ratio of 0.34
versus 0.38 at year-end 2008, underlining the sound liquidity
situation of the Group, a comforting factor much appreciated by
clients. Eligible Tier 1 capital grew to CHF 2.4 billion by mid-year
2009. With a BIS Tier 1 ratio of 16.7% under Basel II, the
capitalisation remains very strong.

Adjusted pro forma financial information for the future Julius Baer
Group Ltd. ** and
the future GAM Holding Ltd.**

On 20 May 2009, Julius Baer announced its intention to separate its
private banking and asset management businesses into two fully
independent groups of companies, both individually listed on the SIX
Swiss Exchange. The separation was approved by shareholders on 30
June 2009. The transaction is expected to be completed by the end of
the third quarter 2009, subject to regulatory approvals. The
development of the private banking and asset management businesses
during the first six months of 2009 is already reported pro forma
under the future structure, i.e. for the future Julius Baer Group
Ltd. and the future GAM Holding Ltd. as if the proposed transaction
occurred on 1 January 2008. The same principle applies to the tables
adjoining this press release. For reference purposes, financial
figures are also included for the two main operating units
constituting the segment reporting prior to the separation, Bank
Julius Baer and Asset Management.

The future Julius Baer Group Ltd.** continues to attract healthy net
new money of 6% annualised

Leading pure-play Swiss private banking group Julius Baer Group Ltd.,
consisting of Julius Baer's entire private banking activities and
with Bank Julius Baer & Co. Ltd. as its main operating unit,
weathered the still demanding market environment well. Total client
assets rose by 10% to CHF 211 billion in the six months ended 30 June
2009. Assets under management totalled CHF 142 billion, an increase
of 12% or CHF 15 billion compared to year-end 2008. Net new money
inflows both from established and growth markets remained healthy and
contributed CHF 4 billion or 6% annualised, yet fell short of last
year's record levels. As a result of a more favourable financial
market environment and the weakening of the Swiss franc against major
currencies, market and currency performance added CHF 8 billion and
CHF 3 billion respectively. In addition, assets under custody were up
by 7% to CHF 68 billion compared to year-end 2008.

Operating income of Julius Baer Group Ltd. fell by 9% to CHF 817
million year on year. Net fee and commission income declined by 22%
to CHF 393 million as a result of 10% lower average assets under
management year on year, the changed asset mix and lower
client-driven transaction volume, partly compensated by higher net
interest income, which rose by 31% to CHF 285 million thanks to
higher average deposit levels and higher interest margins. Following
an exceptionally strong contribution in the first half of 2008, net
trading income decreased by 12% to CHF 151 million.

Operating expenses of Julius Baer Group Ltd. were actively reduced by
5% to CHF 530 million. The headcount was slightly lower at 3,025
(-1%) compared to year-end 2008, but higher on average year on year.
Selective broadening of the relationship manager base caused the net
total number to increase by 17 to 636 while mid- and back-office
staffing was reduced. Mainly driven by lower performance-related
compensation accruals, personnel expenses decreased by 10% to CHF 357
million. General expenses, including valuation adjustments,
provisions and losses, remained broadly stable at CHF 151 million
(+2%).

As a consequence, profit before taxes declined by 16% to CHF 287
million year on year. After deducting taxes of CHF 42 million,
representing a lower tax rate of 15% compared to 20% for the year
2008, the adjusted pro forma net profit of Julius Baer Group Ltd.
amounted to CHF 246 million, down by 13% year on year. The
cost/income ratio increased to 63.0% for the first half of 2009 from
61.2% a year ago, and the pre-tax margin was down to 42.8 basis
points from 45.5 basis points a year ago.

On a pro forma basis, total balance sheet assets remained essentially
stable at CHF 42.4 billion at the end of June 2009. With a BIS Tier 1
ratio of 16.4% under Basel II, Julius Baer Group Ltd. continues to
enjoy a very solid financial base.

The future GAM Holding Ltd.** with marked improvement in asset flows

GAM Holding Ltd., a leading active asset manager, including GAM,
Artio Global, and Julius Baer's portfolio of investment funds,
institutional mandate and Private Label Fund businesses (JBAM),
managed assets of CHF 156 billion at the end of June 2009, an
increase of 6% compared to the end of 2008. A breakdown of the assets
under management showed that CHF 49 billion was managed by GAM,
CHF 51 billion by Artio Global and CHF 63 billion by JBAM (including
Augustus-advised fund assets distributed by JBAM). The total increase
of 6% or CHF 9 billion compared to year-end 2008 was attributable to
net outflows slowing to CHF 0.5 billion, positive market performance
of CHF 4 billion and favourable currency translation effects
resulting from the weakening of the Swiss franc, of CHF 4 billion. In
addition, the acquisition of Augustus Asset Managers Ltd. at the end
of May 2009 added CHF 1.9 billion to total net assets under
management. It is still intended to launch an IPO of Artio Global in
2009, subject to market conditions.

Operating income of GAM Holding Ltd. fell by 39% to CHF 448 million
year on year as a result of significantly (-34%) lower average assets
under management year on year and declining gross margins driven by a
changed asset mix. Active management of its cost base has seen
operating expenses of GAM Holding Ltd. decline by 19% to CHF 344
million year on year. Despite the addition of 50 staff joining as a
result of the acquisition of Augustus Asset Managers Ltd. by GAM,
overall the number of employees declined by 4% to 1,230 year on year,
which together with lower performance-related compensation accruals,
has resulted in personnel expenses declining by 17% to CHF 230
million. Reduced levels of marketing- and IT-related expenses have
contributed to general expenses (including valuation adjustments,
provisions and losses) declining by 24% to CHF 106 million.

As a consequence, profit before taxes declined by 67% to CHF 104
million year on year. After deducting taxes of CHF 26 million,
representing a tax rate of 25%, consistent with the year 2008, the
adjusted pro forma net profit of GAM Holding Ltd. amounted to CHF 78
million, down 66% year on year. The cost/income ratio increased to
77.2% for the first half of 2009 from 57.0% a year ago, and the
pre-tax margin reduced to 14.0 basis points from 27.6 basis points a
year ago.

On a pro forma basis, total balance sheet assets amounted to CHF 3.9
billion at the end of June 2009, 8% or CHF 0.3 billion lower than at
the end of 2008.


The results conference will be webcast at 9:30 am (CET). All
documents (presentation, Business Review First Half 2009, Half-year
Report 2009 and press release) will be available as of 7:00 am (CET)
at www.juliusbaer.com.

Contacts
Media Relations: Tel. +41 58 888 5777
Investor Relations: Tel. +41 58 888 5256

Important dates

The Listing Prospectus for Julius Baer Group Ltd. will be released
mid-September 2009. Both companies will give a strategy presentation
on 24 September 2009.


About Julius Baer
The Julius Baer Group, founded in 1890, is the leading dedicated
wealth manager in Switzerland. It concentrates exclusively on private
banking and asset management for private and institutional clients.
Julius Baer's total client assets amounted to CHF 367 billion at the
end of June 2009, with assets under management accounting for CHF 299
billion. Bank Julius Baer, GAM, Julius Baer Asset Management (JBAM)
and Artio Global Investors are the key businesses of Julius Baer
Holding Ltd., whose shares are listed on the SIX Swiss Exchange and
form part of the Swiss Market Index (SMI), which comprises the 20
largest and most liquid Swiss stocks.
Julius Baer employs a staff of over 4 000 in more than 20 countries
and 40 locations, including Zurich (head office), Buenos Aires,
Dubai, Frankfurt, Geneva, Hong Kong, London, Lugano, Milan, Moscow,
New York, Singapore and Tokyo.
On 20 May 2009, Julius Baer announced its intention to separate its
Private Banking and Asset Management businesses into two
independently listed groups of companies in order to enhance both
businesses' ability to deliver their full strategic potential.
For more information visit our website at www.juliusbaer.com

* Excluding integration and restructuring expenses, the amortisation
of intangible assets as well as a CHF 17.4 million one-off charge
(net of taxes) related to the separation of the private banking and
asset management businesses. Including these positions, the
shareholders' net profit for the first half of 2009 amounted to
CHF 219 million versus a net profit of CHF 412 million in the first
half of 2008.
**Based on pro forma information showing all financial figures
calculated as if the transaction had occurred on 1 January 2008.



--- End of Message ---

Julius Baer Holding
Bahnhofstrasse 36, P.O. Box Zurich
Switzerland

ISIN: CH0029758650; Index: SLCI, SMI, SMIEXP, SPI;
Listed: Main
Market in SIX Swiss Exchange;

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