Swiss private bank Julius Baer has posted an underlying net profit of CHF701m for full year ended 31 December 2015, up 20% compared to CHF585.8m a year ago.
The bank’s adjusted net profit was affected by the provision of $547.25m (CHF521m) for the eventual settlement with the US Department of Justice (DOJ) regarding the legacy US cross-border business (the US provision), and decreased by 52% to CHF 279m.
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Julius Baer said the US Justice Department has now provided final approval of the bank’s settlement, pending a court hearing on the matter.
The bank added that its assets under management (AuM) for 2015 increased to CHF300bn, up 3% from CHF290.6bn during the end of 2014 due to net new money of CHF12bn and a net positive acquisition impact of CHF8bn, partly offset by a negative currency impact of CHF10bn and negative market performance of CHF1bn.
The group’s operating income grew by 6% to CHF2.7bn compared to CHF2.5bn resulting in an unchanged gross margin of 94 basis points (bps).
Adjusted operating expenses were up 30% to CHF2.4bn mainly as a consequence of the US provision of CHF521m.
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By GlobalDataThe group said that its total assets increased by 2% to CHF 84.1bn.
Julius Baer’s adjusted cost/income ratio improved from 70% to 67%, well within the 65-70% target range.
Adjusted profit before taxes were down 56% to CHF309m including the US provision, while excluding the US provision, underlying profit before taxes grew by 17% to CHF830m and the underlying pre-tax margin grew from 26 bps to 29 bps.
Julius Baer Group CEO Boris Collardi said: "It is a testament to the strength and the agility of the Julius Baer franchise that, despite the market turbulence and the negative impact of the stronger Swiss franc, the Group reached a record high CHF 300 billion of assets under management, supported by continuing healthy inflows, and was able to grow underlying net profit by 20%.
"The strong profit growth was helped by the full benefits of the synergies realised on the landmark IWM acquisition, which was completed last year with the successful transfer of the India business in September.
"Following the final approval of the settlement regarding our legacy US cross-border business by the DOJ, we expect that we will soon be able to complete the court process and announce the final resolution."
