Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on JULIUS BAER GROUP LTD. We currently have 5 research reports from 1 professional analysts.
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JULIUS BAER GROUP LTD
JULIUS BAER GROUP LTD
Strongly improved profit as expected but also a worrying staff cost increase
01 Feb 17
Reported net profit attributable to shareholders increased from CHF121m for 2015 to CHF619m for 2016. However, underlying net profit increased (which excludes a CHF521m US litigation provision for FY2015) only by 1% to CHF706m for 2016 compared to 2015 according to Julius Baer. Net interest and dividend income rose by 23% to CHF877m in 2016. Net commission and fee income was up by 3% to CHF1.56bn for 2016. Trading income declined by 24% to CHF333m in the same period. Operating income rose by 6% to CHF2.85bn for 2016 compared to 2015. Personnel expenses were up by 8% to CHF1.34bn for 2016 compared to 2015. General expenses decreased by 43% to CHF623m in 2016 mainly due to the US tax evasion provisions of CHF521m in 2015. Operating expenses were therefore down by 18% to CHF2.1bn for 2016. Assets under management (AuM) increased by 12% to CHF336bn compared to year-end 2015. Net new money inflows were CHF12bn (+4.0%) in 2016. The Basel 3 CET1 ratio (phase in) stood at 16.4% and fully applied at 10.6% at the end of 2016. The dividend proposal increased from CHF1.10 for FY2015 to CHF1.20 per share for FY2016. The bank is due to release the 2016 annual report on 20 March.
Expected strong profit increase
25 Jul 16
The reported net profit jumped from CHF40m for H1 15 to CHF362m for H1 16. Interest and dividend income rose by 33% to CHF510m in H1 16. Net commission and fee income declined by 14% to CHF739m for H1 16 compared to H1 15. Trading income was down by 46% to CHF118m in the same period. Operating income increased slightly by 1% to CHF1.42bn for H1 16 compared to H1 15. Personnel expenses were flat at CHF632m for H1 16. General expenses declined by 53% to CHF288m in H1 16 compared to H1 15 which was burdened by US tax evasion provisions of CHF326m. Operating expenses were down by 27% to CHF985m for H1 16. Pre-tax profit increased from CHF54m for H1 15 to CHF440m for H1 16. Assets under management (AuM) rose by 4% to CHF311bn compared to year-end 2015. Net new money inflows were CHF5.5bn (+3.7% annualised) in H1 16. The Basel 3 CET1 ratio stood at 15.9% and 14.8% on a Basel 3 (2019) fully applied basis as at 30 June 2016.
FY15 net profit burdened by litigation provisions but increased targets and dividend
01 Feb 16
Reported net profit was down by 67% to CHF121m for 2015 compared to 2014. However, underlying net profit increased (which excludes a CHF521m US litigation provision) by 20% to CHF701m for 2015 compared to 2014 according to Julius Baer. Interest and dividend income rose by 9% to CHF847m in 2015. Net commission and fee income was flat at CHF1.52bn for 2015. Trading income was up by 33% to CHF436m in the same period. Operating income rose by 6% to CHF2.7bn for 2015 compared to 2014. Personnel expenses were down by 2% to CHF1.24bn for 2015 compared to 2014. General expenses jumped by 81% to CHF1.1bn in 2015 mainly due to the US tax evasion provisions of CHF521m. Operating expenses were up by 23% to CHF2.56bn for 2015. Assets under management (AuM) increased by 3% to CHF300bn compared to year-end 2014. Net new money inflows were CHF12bn (+4.2%) in 2015. The Basel 3 CET1 ratio (phase in) stood at 18.3% at the end of 2015. The dividend proposal increased from CHF1.00 for FY2014 to CHF1.10 per share for FY2015. Julius Baer also upgraded its cost/income ratio target from 65%-70% to 64%-68% (67% for FY2015). It downgraded its BIS CET 1 target ratio from 15% to 11%. Julius Baer also intends to grow the ordinary dividend pay-out ratio to 40% of adjusted net profit. The bank will release the 2015 annual report on 21 March.
No loss for H1 15 despite US tax evasion provision
20 Jul 15
The reported net profit was down by 78% to CHF40m for H1 15 compared to H1 14. However, underlying net profit increased (which excludes a CHF326m US litigation provision) by 34% to CHF384m for H1 15 compared to the same period last year according to Julius Baer. Interest and dividend income rose by 11% to CHF384m in H1 15. Net commission and fee income increased by 6% to CHF792m for H1 15. Trading income was up by 89% to CHF217m in the same period. Operating income rose by 14% to CHF1.41bn for H1 15 compared to H1 14. Personnel expenses were flat at CHF631m for H1 15 compared to H1 14. General expenses jumped by 126% to CHF613m in H1 15 mainly due to the US tax evasion provisions. Operating expenses were up by 36% to CHF1.35bn for H1 15. Assets under management (AuM) decreased by 2% to CHF284bn compared to year-end 2014. Net new money inflows were CHF6.5bn (+6% annualised) in H1 15. The Basel 3 CET1 ratio stood at 19.1% and 13.4% on a Basel 3 (2019) fully applied basis as at 30 June 2015.
$350m litigation provision in H1 15
24 Jun 15
Julius Baer announced it is to make a preliminary provision of $350m for its eventual settlement with the US Department of Justice (DOJ) regarding its US tax evasion case. The litigation provision will be charged to the 2015 half-year results. The bank said, if the amount had been provisioned at the end of April 2015, the group’s BIS total capital ratio would have been 20.9% and its BIS tier 1 capital ratio 19.6%.
N+1 Singer - Uncovered Gems - Speed Dating Lunch - A Famous Five for the future?
12 Apr 17
On Friday we hosted our third “speed dating” lunch with the management of five very interesting and contrasting companies not under our formal coverage: Be Heard, Byotrol, Gfinity, Oxehealth and Plant Impact. Each company gave a concise and punchy overview of its business and investment case to a group of fund managers, before rapid fire Q&A. Below we summarise our thoughts on each company with more details inside the note, plus some relevant slides. We believe that all five companies are well-managed and well worth a closer look - we intend to repeat this efficient and popular format for engaging with management teams.
Non Life Insurance - Growing impact of hacks on share prices
18 Apr 17
Our November 2016 Cyber report flagged the growing impact of cyber attacks on quoted companies, noting that Yahoo’s breach would inevitably negatively impact Verizon’s offer price, which it did. A report by CGI and Oxford Economics has found that, to date,severe hacks on UK companies permanently reduced their share price by 1.8% - or approximately a £120m hit to MCap for a FTSE 100 firm. With GDPR coming into effect next year, we expect more headlines. That has got to be good for cyber insurers and cyber security firms.
UK Housebuilding Sector: Q1 2017
10 Apr 17
Baron King of Lothbury, also known as Mervyn King former Governor of the Bank of England, is married to Barbara, a Finnish lady. She was his girlfriend in 1970 but distance and steam-driven telecoms conspired to keep them apart. Barbara went on to marry someone else and divorce - before being reunited with King in the late 1990s. They married in 2007 and King, who had never had children, was presented with two step-children and four grandchildren; and, in a Sunday Times interview, he quoted the Finnish apothegm “Grandchildren are the dessert of life”.
N+1 Singer - Small-cap quantitative research - Growth style screen revamp and 10 focus stocks
06 Apr 17
We have reviewed the performance of our consistent growth screen since the previous refresh on 27 September 2016 and revamped the selection parameters to focus more on forecast sales and EPS growth going forward. In the period under review the consistent growth style screen outperformed the small-cap benchmark by c. 6% and underperformed the microcap index by a similar amount. Interestingly, although growth doesn’t always seem to be defensive as might be expected, however it appears right to buy growth on dips caused by or coincident with wider market volatility. In the new forecast growth screen we take a close look at 10 focus stocks. We will monitor performance and refresh it in three to four months time.
03 Apr 17
After much heralding, MIFID II is finally beginning to have an impact on the business of investment research, though its true ramifications might take years to be seen. The role of analyst research is widely misunderstood. It is not all about the conclusion: the rating and price target. The real content of research is about what is discounted in the current share price and what assumptions would produce different outcomes.