Bond.az -- Julius Baer posted a stronger-than-expected profit in its four-month interim management statement, with revenues and margins comfortably ahead of consensus, though the print showed a sharp miss on client inflows.
Adjusted profit before tax came in at 598 million Swiss francs, around 23% ahead of consensus, driven by materially better revenues.
Gross margin in the four months reached 90 basis points, above the consensus estimate of 84 basis points. Interest-driven income at 23 basis points and recurring fees at 37 basis points were both in line with expectations.
The cost-to-income ratio came in at 62%, well below the consensus of 67%, reflecting the revenue strength, while cost margins at 55.8 basis points were only a touch better than the 56.3 basis points consensus had expected.
Julius Baer reported a CET1 ratio of 18.1%. The weak spot of the print was flows. Net new money came in at 3 billion francs, or 1.7% annualised, against the consensus of 5.3 billion francs and an expected rate of 3.1%. Total assets under management ended the period at 528 billion francs, around 1% below consensus.
Morgan Stanley analysts said: "Inflows were much weaker, at 1.7%. While we expect net upgrades, stock was strong into results, and hence may be weak today on the back of poor print on inflows."
Julius Baer attributed the shortfall to the continued implementation of its revised risk and compliance framework, heightened uncertainty linked to the Middle East conflict, and a pause in client releveraging. The company reiterated its target of 4-5% net new money by 2028.
