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MarketScreener Homepage  >  Equities  >  Swiss Exchange  >  Julius Bär Gruppe    BAER   CH0102484968

JULIUS BÄR GRUPPE

(BAER)
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Julius Bär Gruppe : Baer misses new money goal on Kairos outflows

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07/22/2019 | 06:55am EDT
Swiss bank Julius Baer CEO Hodler addresses the annual news conference in Zurich

ZURICH (Reuters) - Swiss private bank Julius Baer missed its target for net new client money in the first six months of the year as outflows from funds at its Italian subsidiary Kairos hampered growth at the rest of the business.

Switzerland's third-largest listed bank said it brought in 6.2 billion Swiss francs (£5.05 billion) of net new money, up 3.2% on an annualised basis, and that growth would have reached its 4-6% target range without the outflows from Kairos.

Private banks are struggling with low interest rates, choppy markets, and risk-averse clients, while Julius Baer is also feeling the effect of poor fund performance at Kairos last year.

The bank is considering options for Kairos - including divesting it, forming a partnership or keeping it and trying to improve profitability - and intends to make a decision soon, outgoing Chief Executive Bernhard Hodler said on Monday.

"Outflows (from Kairos) were mainly due to performance in 2018, that was not so fantastic ... This year is actually good. Based on that, I expect the outflows will slow down or stop," Hodler told analysts and journalists at his last earnings conference for the bank.

"Maybe our announcement to look into strategic options also created a bit of uncertainty, so we are very mindful. We will communicate our strategy very soon with Kairos."

Hodler is due to be replaced by the bank's current head of intermediaries and global custody, Philipp Rickenbacher, in September.

While Baer's overall inflows have picked up since late 2018, margins remain under pressure.

It posted a 19% decline in adjusted net profit to 391 million francs in the six month period as tepid trading continued from its wealthy clients, although it said that was a pick up from challenging conditions late last year.

The bank's shares were up 2.8% at 1040 GMT.

In February, Julius Baer scaled back growth targets and announced large-scale cost cuts after a tough end to 2018 caused it to miss its goals.

It said on Monday the programme, which aims to save around 100 million francs by cutting its workforce by around 2% and moving out of less attractive markets, was on track.

It is aiming to hit an adjusted cost-income ratio below 68% by 2020, an improvement on the 71% posted through June.

(Reporting by Brenna Hughes Neghaiwi; Editing by Michelle Martin and Mark Potter)

By Brenna Hughes Neghaiwi

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Financials (CHF)
Sales 2019 3 382 M
EBIT 2019 945 M
Net income 2019 679 M
Debt 2019 10 033 M
Yield 2019 4,10%
P/E ratio 2019 12,3x
P/E ratio 2020 10,1x
EV / Sales2019 5,42x
EV / Sales2020 2,61x
Capitalization 8 316 M
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TrendsBearishBearishNeutral
Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 21
Average target price 48,58  CHF
Last Close Price 38,15  CHF
Spread / Highest target 53,2%
Spread / Average Target 27,3%
Spread / Lowest Target -14,9%
EPS Revisions
Managers
NameTitle
Bernhard Hodler Chief Executive Officer
Daniel J. Sauter Chairman
Nic Dreckmann Chief Operating Officer
Dieter A. Enkelmann Chief Financial Officer
Claire Giraut Independent Non-Executive Director
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