Julius Baer 10-Month AuM Up, Sees Kairos-related Charge In FY19; Plans Buy Back

Julius Baer Group (JBARF.PK, JBAXY.PK) reported Tuesday that its assets under management or AuM for the ten months to the end of October grew 10 percent to 422 billion Swiss francs.

The company attributed the increase to strong positive market performance and continued net new money inflows, partly offset by the year-to-date strengthening of the Swiss franc against the euro. The company said the benefits of cost-reduction programme are starting to materialise.

At the end of October 2019, AuM of Italian asset and wealth management subsidiary Kairos stood at 8.4 billion francs, down from 11.8 billion francs at the end of 2018. The company said Kairos has continued to operate profitably in the first ten months of 2019, at a gross margin that improved from 2018.

The annualised net new money growth rate for the first ten months of 2019 was slightly less than 3 percent, compared to 4.5 percent in full year 2018 and 3.2 percent in the first half of 2019.

The company said it is unlikely to achieve its net new money medium-term target this year.

Gross margin in the ten months was just above 82 basis points, compared to 85.5 bp for full year 2018 and 83.2 bp in the first half of 2019. The gross margin in the July to October 2019 period was moderately lower than in the first half, due to lower fee income from Kairos, a slightly decreased contribution from net interest income, as well as a small credit loss.

Julius Baer now expects the goodwill on its investment in Kairos will be partially impaired, resulting in a non-cash charge of 90 million euros or about 99 million francs in its fiscal 2019 results.

The company will publish its financial results for 2019 on February 3.

Further, Julius Baer announced the launch of share buy-back programme of up to 400 million francs. The programme will be launched on November 20 and is expected to run until the end of February 2021.

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