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Julius Baer 4-Month Margin Rises, Assets Under Management Down; Stock Up

Shares of Julius Baer Group (JBARF.PK,JBAXY.PK) were gaining around 6 percent in the morning trading in Switzerland after the company reported higher margin in the first four months of fiscal 2020 amid the impacts from Covid-19. Assets under management declined at the end of April.

In its trading update, the company noted that strong increase in client activity drove significant improvement in profitability.

Despite a slightly negative impact from lower net interest income and a moderate rise in expected credit losses, the gross margin for the four months rose to 95 basis points. The gross margin in each of the four months was significantly above the 82 basis points reported for the full year 2019, and particularly strong in March.

Following the 2019 cost-reduction programme, operating expenses were lower than in the same period last year. As a result, the adjusted cost/income ratio improved to 64 percent, compared to 71 percent for the full year 2019. The adjusted pre-tax margin was 35 basis points, a significant increase from the 22 basis points reported for the full year 2019.

Assets under management declined to 392 billion Swiss francs at the end of April 2020, a year-to-date decrease of 8 percent. The company noted that net new money inflows were more than offset by negative market performance and the strengthening of the Swiss franc.

Julius Baer said it has continued to operate and deliver its products and services with virtually no interruptions despite the increased order and trade volumes following the COVID-19 outbreak.

Philipp Rickenbacher, CEO of Julius Baer, said, "We are pleased to be able to report a strong start to the year, although it is clearly too early to assess with any certainty the impact of the COVID-19 crisis on the global economy, the financial markets, and the results of Julius Baer for the remainder of 2020."

Regarding its proposal to split the previously announced distribution, the company noted that the first distribution of CHF 0.75 per share was approved by shareholders at the Ordinary Annual General Meeting held on May 18.

The second distribution of CHF 0.75 per share will be proposed for approval at an Extraordinary General Meeting expected to be held on November 2.

In Switzerland, Julius Baer shares were trading at 39.31 francs, up 6.42 percent.

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