Julius Baer H1 profit boosted after UBS, CS tie-up
ZURICH (Reuters) -Swiss wealth manager Julius Baer on Monday reported a jump in money inflows and hiring in the months after it was announced that Credit Suisse would be rescued by larger rival UBS.
In the first half of 2023, Switzerland's newly crowned number 2 bank saw assets under management grow 4% to 441 billion Swiss francs ($509.6 billion), as it attracted 7.1 billion francs in new money from wealthy clients.
Its share price rose more than 8% in early trading.
The inflows were slightly more than the 6.8 billion francs forecast by analysts in a poll compiled by newswire AWP, with the bank saying it saw strong contributions from clients based in Switzerland, Europe, Asia, Israel and the Middle East.
"We are very glad to see the net new money momentum that we have generated in the first half of this year," Chief Executive Philipp Rickenbacher said in a call with journalists.
The results mark a pick up from May, when Julius Baer disappointed investors who had expected the bank to benefit from Credit Suisse's troubles, by reporting modest inflows for the first four months of the year.
The Zurich-based firm said net profit attributable to shareholders rose 18% to 531 million Swiss francs ($613.2 million) from 451 million Swiss francs a year earlier.
"JB has stepped up investments and accelerated relationship manager hiring to benefit from CS's demise," Vontobel analyst Andreas Venditti wrote in a note.
Julius Baer said it had hired 57 additional relationship managers so far this year and planned to hire more in the second half of the year as well as in 2024 and 2025.
"Yes we have been able to benefit from CS and from UBS but we have been able to hire from a much broader array of talent sources all across the globe," said Rickenbacher.
Deutsche Bank Research analyst Benjamin Goy said Credit Suisse's collapse has the potential to be a major accelerator for Julius Baer over the next two to three years.
"We expect hiring of relationship managers to rise, driving net new money above historical average from 2H23 onwards," he wrote in a note.
($1 = 0.8654 Swiss francs)
(Reporting by Noele Illien; editing by Brenna Hughes Neghaiwi, Kirsten Donovan)
