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Investing.com -- Julius Baer Group (SIX:BAER) on Monday reported a net profit of CHF 1.02 billion for 2024, more than doubling from the previous year, driven in large part by a tax provision release.
The Swiss private banking company benefited from a one-time tax-related gain following the completion of a corporate income tax audit covering financial years 2017–2022. This resulted in a 47% reduction in income taxes, significantly boosting the bank’s bottom line.
The strong profit increase came despite higher operating expenses, which rose 3% to CHF 2.81 billion, reflecting investments in hiring and technology.
The cost-to-income ratio, a key efficiency metric, stood at 70.9%, slightly higher than the previous year’s 69.1% on an underlying basis.
Meanwhile, total operating income reached CHF 3.86 billion, up 19% from the previous year, though this was partly tempered by increased interest expenses.
Julius Baer’s assets under management surged 16% to a record CHF 497 billion, supported by CHF 14.2 billion in net new money inflows, rising global stock markets, and the weakening Swiss franc.
Client assets, including those under custody, reached an all-time high of CHF 590 billion. The firm saw contributions from key European markets such as the UK, Germany, and Switzerland, as well as strong inflows from Singapore, Hong Kong, India, and the UAE.
The bank maintained a strong capital position, with its Common Equity Tier 1 capital ratio increasing to 17.8% from 14.6% in 2023, well above regulatory requirements.
The total capital ratio also improved to 26.4%. Liquidity remained strong, with a liquidity coverage ratio of 292%.
Julius Baer proposed an unchanged dividend of CHF 2.60 per share, underscoring confidence in its capital position.
However, despite exceeding the threshold for a potential share buyback, the board opted against launching a new program.
The bank also announced an extension of its ongoing cost-cutting program, targeting an additional CHF 110 million in gross savings by the end of 2025. This follows a prior cost reduction initiative that achieved CHF 140 million in savings.
In a structural shift, Julius Baer downsized its executive board to five members as part of efforts to streamline decision-making and improve efficiency.
“Given its high-quality client portfolio and excellent people, as well as its strong and resilient brand and unique dedication to wealth management, I believe Julius Baer has the strong foundation and all the ingredients to succeed,” said Stefan Bollinger, chief executive at Julius Baer Group in a statement.