WASHINGTON (dpa-AFX) - Swiss private banking group Julius Baer Group Ltd. (JBAXY.PK,JBARF.PK) reported Monday an 8 percent increase in first-half assets under management with more-than-doubled net new money, first-time consolidation of Brazilian subsidiary GPS, as well as positive market performance. Profit for the period climbed 56 percent, despite a sharp decline in net trading income.
Further, Julius Baer said it has entered into a strategic cooperation and referral agreement with Bank Leumi. Under the deal, Leumi will transfer its Swiss-based private banking business with AuM of 5.9 billion francs to Julius Baer, and Julius Baer intends to acquire Leumi's private banking subsidiary in Luxembourg with AuM of 1.3 billion francs. The total transaction goodwill payable is 10 million francs in cash.
Julius Baer expects the Swiss deal to be earnings-per-share neutral in 2015 and low single-digit percentage accretion from 2016.
As of June 30, Julius Baer's assets under management or AuM totaled 274.2 billion francs, 7.8 percent higher than last year's 217.7 billion francs. Average AuM increased 6.1 percent. Net new money of 7.5 billion francs climbed from last year's 3.4 billion francs.
The company said the integration of Merrill Lynch's International Wealth Management or IWM business entered its final phase, and Group AuM included 56 billion francs from IWM, of which 48 billion francs was booked on the Julius Baer platforms.
Julius Baer noted that the productivity of the IWM AuM is very close to the 2015 target and the former IWM advisers contributed significantly to net inflows earlier than expected. The IWM integration-related restructuring and rightsizing is well on track.
For the first six months, the company's net profit, on IFRS basis, attributable to shareholders climbed 56.4 percent to 178.3 million Swiss francs. Earnings per share climbed 53 percent to 0.82 francs.
Adjusted net profit advanced 10 percent to 287.6 million francs, with adjusted earnings per share rising 7.7 percent to 1.32 francs.
Operating income went up 14.8 percent to 1.24 billion francs from prior year's 1.08 billion francs. In the period, net interest and dividend income grew 26 percent and net commission and fee income climbed 25 percent. However, net trading income declined 38 percent.
The company further said that the previous estimate of approximately 455 million francs for total transaction, restructuring and integration costs has been revised down to approximately 435 million francs.
In Zurich, Julius Baer shares closed Friday's trading at 36.55 francs, up 0.23 francs or 0.63 percent.
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