Julius Baer net new money beats expectations, but de-risking clouds outlook
Julius Baer Reports Strong Net New Money Amid Ongoing De-risking Efforts
ZURICH, July 21 (Reuters) - Julius Baer said on Tuesday net new money for the first six months of the year reached 5.7 billion Swiss francs ($7.04 billion), beating expectations after a slow start while warning that de-risking efforts would continue to weigh on growth.
Shares in the Swiss bank were down more than 4% in early trading.
Net New Money and Growth Outlook
Annualised net new money growth in the first half of 2026 was 2.2%. Julius Baer said progress continued to be affected by the implementation of its revised risk and compliance framework and warned the impact of de-risking was likely to persist into 2027.
De-risking Strategy and Impact
"De-risking takes time," CEO Stefan Bollinger said, adding the process targets different client types in high-risk countries or certain sensitive industries but declining to quantify the impact for next year.
Future Growth Targets
The bank nevertheless confirmed its net new money growth target of 4%-5% by 2028.
Financial Performance and Cost Management
Net profit for the first half of 2026 rose 128% to 673 million francs from a year earlier, when profits were hurt by loan loss provisions.
Cost-Income Ratio and Investments
Julius Baer's cost-income ratio will likely be below 67% for the second half of the year, CFO Evie Kostakis told analysts.
The bank foresees an increase in costs in the second half due to investments in the Swiss core banking platform, an efficiency program and the hiring of new relationship managers, she added.
Share Buyback and Management Changes
Buyback Timing Still Unclear
Julius Baer again declined to say when it might resume share buybacks, which hinge on an ongoing assessment by the Swiss regulator, but alluded to some progress following the completion of management changes.
"This moves into the right direction," Bollinger told reporters. "We have now the second line in place and so we're feeling very good about our setup".
Leadership Overhaul
Earlier this month, Julius Baer said Peter Burrill would join as its new chief financial officer in August, subject to regulatory approval, completing a top management overhaul after the bank suffered heavy losses from risky lending.
($1 = 0.8100 Swiss francs)
(Reporting by Ariane Luthi, Editing by Miranda Murray, Eileen Soreng and Louise Heavens)
