Profit soars at Bank Julius Bär

Assets under management at Julius Bär were up by a "robust" 17 per cent Keystone

Swiss private bank Julius Bär has beaten expectations with a rise in 2004 net profit to SFr222 million ($191.5 million) from SFr82 million in 2003.

Total assets managed by the group, which includes institutional clients, rose 17 percent to SFr135 billion.

The bank, which is based in Zurich, is proposing a return of cash to shareholders with a dividend increase and a share repurchase plan.

Julius Bär said on Wednesday it would launch a share buyback programme worth up to SFr90 million, joining other European banks in returning capital to shareholders through share repurchases.

Assets managed by Bär’s core private banking division remained flat during 2004 at SFr61 billion, as a net outflow of SFr800 million and negative currency effects outweighed market gains.

Restructuring

In its outlook, Bär said it expected restructuring efforts to improve its earnings power but that dull markets and only “modest inflows” of new money from its traditional private client base could weigh on future results.

“The results don’t present us with anything surprising that should stimulate the shares,” said analyst Christoph Ritschard at the Zurich cantonal bank.

Julius Bär’s chairman, Raymond Bär tried to quash speculation that the bank’s surprise move in January to liberalise its shareholding structure would provoke a takeover bid.

“Julius Bär is not a takeover candidate. Quite the contrary is true. Apart from organic growth, we can envision engaging in value-enhancing acquisitions,” he said in a statement.

Share structure

The bank liberalised its shareholding structure earlier this year in a move to dilute the founding family’s control, sending its share price soaring and fuelling speculation that the 115-year-old bank would soon be taken over.

The Bär family and a few other people control 52 per cent of the voting rights at present, although they hold only 18 per cent of the shares.

The family’s voting rights will be reduced to 18 per cent if shareholders approve the new structure at their annual meeting on April 12.

Bär proposed to raise its dividend by two francs to eight francs per share. Baer shares have climbed more than 24 percent so far this year on the takeover speculation.

Baer and its rivals Sarasin and Vontobel face rising regulatory costs and increasingly demanding customers who have favoured UBS, the world’s largest wealth manager, and rival Credit Suisse.

swissinfo with agencies

In brief

The Julius Bär bank was founded in 1890.

Its headquarters are in Zurich but the group also has operations in Geneva, Frankfurt, London, Milan and New York.

At the end of 2004, the bank had a staff of 1,840.

Total assets under management at the end of 2004 were SFr135 billion.