Julius Baer shares slide on profit miss, tepid cash inflows

By John Revill

ZURICH (Reuters) -Swiss private bank Julius Baer's shares fell 10% on Thursday after the wealth manager missed profit forecasts and reported only a tepid increase in cash inflows from rich clients.

The first half results were the latest blow for Julius Baer which has had a tumultuous start to 2024 with CEO Philipp Rickenbacher exiting after the bank reported losses of 586 million Swiss francs ($663.80 million) on loans to collapsed property giant Signa.

The affair dented customer confidence in the Zurich-based wealth manager, leading to clients withdrawing cash in January, before inflows turned positive from February to June.

"After a challenging start to the year, Julius Baer is now regaining its momentum," interim CEO Nic Dreckmann told reporters.

When asked if clients' concerns following the Signa episode had now abated, he said: "That's absolutely the case, we've passed that one."

For the first six months Julius Baer reported net new money of 3.7 billion Swiss francs, broadly in line with expectations but down from the 7.1 billion franc inflow a year earlier.

The annualised growth rate of 1.7% compared unfavourably with Swiss rival EFG International which on Wednesday said it had attracted net new money of 5.2 billion francs in the six months for an annualised growth rate of 7.3%.

Julius Baer on Thursday said it had been hit by a big drop in net interest income, as the bank paid out more to clients holding deposits.

This pushed adjusted net profit 15% lower to 459.7 million Swiss francs ($520.79 million) missing the consensus forecast of 490 million francs.

"Baer's 1H24 results are disappointing," said Citi in a note, highlighting the profit miss at the bank, which this week named Goldman Sachs partner Stefan Bollinger its new CEO.

Bank Vontobel analyst Andreas Venditti mentioned the lack of a new share buyback, as well as the sluggish recovery of net new money as disappointments.

"It shows the bank is still trying to rebuild confidence and this is going to take some time," said Venditti. "The new CEO Stefan Bollinger will find plenty of work to do at JB, including restoring confidence among customers, employees and the regulator following the Signa affair."

($1 = 0.8828 Swiss francs)

(Reporting by John Revill, Editing by Miranda Murray, Kirsten Donovan and Christina Fincher)