Julius Baer sees Adj. Cost/revenue ratio below 64% by 2025

By Giulia Petroni

Julius Baer Gruppe AG presented its medium-term strategy on Thursday and said it was on track to meet its targets for the current year despite a decline in assets under management in the first four months of 2022.

The Swiss private banking group said it was targeting an adjusted cost-to-income ratio below 64% and an adjusted pre-tax margin of 28 to 31 basis points by 2025.

The company expects annual growth of more than 10% in adjusted pre-tax profit over the period 2023-2025 and a BIS CET1 adjusted return on capital of at least 30% during the same period.

Gross expense savings are expected to be 120 million Swiss francs ($120.9 million) by 2025, according to the company.

Julius Baer also said he aims to return capital beyond a CET1 BIS capital ratio of 14% through annual share buybacks and a dividend payout ratio of 50%.

“In our next strategic cycle, we will focus on creating value for our customers, increasing recurring revenue generation and efficiency,” said Chief Executive Philipp Rickenbacher. “We will also expand our business in selected key markets and innovate in wealth management for the benefit of our clients.”

Julius Baer said assets under management fell 5% year-on-year to 457 billion francs at the end of April due to negative market performance, business disposals and client deleveraging.

Gross margin declined to nearly 85 basis points in the first four months of the year, while the adjusted cost-to-income ratio was 63% for the period, the company said. The adjusted pre-tax margin was 30 basis points.

As the period was hit by challenging geopolitical and macroeconomic environments, Julius Baer said he was on track to meet his annual financial targets.

Write to Giulia Petroni at [email protected]

Sallie R. Loera