Wealth manager Julius Bär saw its bottom line decline last year, amid cash outflows and shrinking assets under management. Shareholders will nevertheless benefit from a stable dividend.
“We are ending the 2020-2022 strategic cycle with the second best result in the group’s history,” said CEO Philipp Rickenbacher, quoted in a statement released Thursday. During this period, the bank successfully transformed its business and achieved all of the financial goals it set for itself, he added.
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Operating income remained almost unchanged (-0.1%) in 2022 at 3.85 billion francs, while operating expenses (according to IFRS) swelled by 7% to 2.77 billion, detailed the group. Zurich. The expense-to-revenue ratio, a closely followed performance indicator, deteriorated by 2.1 percentage points to 65.9% and the adjusted gross margin fell by 1.2 points to 27.0. %.
In terms of profitability, operating income fell by 9.8% to 1.2 billion. Net profit, according to the IFRS accounting standard, contracted by 12% to 950 million francs, while net profit adjusted for acquisitions fell by 8% to 1.05 billion francs.
In 2022, assets under management sank by 12% to 424 billion. New money inflows only reached 9 billion, following 19.6 billion collected in 2021, which represents an annualized growth of 2%. In the second half of the year, the establishment collected 10 billion in cash, including 6 billion in the last two months of the financial year, following reflux of 1 billion in the first six months of the past financial year.
These key figures are higher than the forecasts of analysts consulted by the AWP agency, except for the cost-income ratio expected at 66.4%.
Market and currency effects
The boss of Julius Bär admitted that the bank had partially benefited from the setbacks of its rival Credit Suisse. The bank with two sails, in difficulty, had reported last November withdrawals of around 84 billion francs at the last partial, including 64 billion for the sole activity of wealth management. UBS, which unveiled its annual financial performance on Tuesday, also lip serviced having recovered some of its neighbor’s reflux.
As for assets under management, they were mainly penalized by “the significant corrective effects on the world markets” following the tightening of monetary policies and negative exchange rate variations.
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Shareholders will receive an unchanged dividend of 2.60 francs per share for the past year. This is barely less than market forecasts, which were counting on an average of 2.61 francs. The current share buyback program should end at the end of February and reach the targeted maximum amount of 400 million francs.
Management did not provide details on the group’s outlook. So far, the establishment anticipates in the medium term, i.e. over the period 2023-2025, an adjusted pre-tax margin between 28 and 31 basis points and an adjusted cost/income ratio of less than 64%. Double-digit annual growth is expected in adjusted pre-tax profit. The adjusted return on core capital (CET1) should meanwhile be at least 30%.
In anticipation of the general meeting on April 13, the bank has proposed the appointment of Jürg Hunziker to the board of directors.
