Julius Baer first-half results clouded by legacy charges

By Ariane Luthi

ZURICH (Reuters) -Julius Baer's profit fell 35% year-on-year to 295 million Swiss francs ($370 million) in the first half, pressured by loan loss provisions and a charge from the sale of its Brazilian wealth management arm, the Swiss bank said on Tuesday.

The Zurich-based wealth manager said it was making good progress in recovering from legacy problems, after heavy losses last year mainly linked to the collapse of property group Signa led to a management shake-up.

But it declined to say when it might resume share buybacks, which hinge on an ongoing assessment of the bank by the Swiss regulator following the Signa losses.

"Unfortunately, I cannot give you a clear timeline because I don't have one," CEO Stefan Bollinger said when asked on an investor call whether an update on capital plans could be expected with year-end results.

Bollinger later told journalists that the bank was committed to doing share buybacks over time.

Its shares erased early gains to trade down 0.8% at 0910 GMT.

Julius Baer announced in May a 130 million franc writedown on its credit book.

"Once the credit review has been completed, we'll be in a position to decide whether or not additional loan loss allowances are required," Bollinger said.

The bank said net new money more than doubled year-on-year to 7.9 billion francs, bringing assets under management to 483 billion francs, as of end-June.

However, the inflows, plus rising global equity markets, were more than offset by the impact of the weaker U.S. dollar and the sale of Julius Baer Brazil in March, it said.

The bank said it was on track to hit its target for 130 million francs in additional gross cost savings by the end of 2025.

"Some of our cost-saving efforts are starting to pay off," Bollinger said, adding that Julius Baer's underlying cost-income ratio improved by 3 percentage points to 68.2%.

($1 = 0.7975 Swiss francs)

(Reporting by Ariane Luthi. Editing by Sherry Jacob-Phillips and Mark Potter)