Julius Baer profits dip in 2022 as money inflow growth picks up

By Noele Illien

ZURICH (Reuters) - Swiss wealth management firm Julius Baer on Thursday said profits fell in 2022 in a tough market environment, as strengthening inflows of new client money towards the end of the year helped it hit its business cycle targets.

Net profit dropped 12% to 950 million Swiss francs ($1.05 billion) from 1.08 billion francs. The bank, which competes with UBS and Credit Suisse in managing the investments of the ultra-wealthy, saw assets under management fall by 12% as global stock and bond markets underwent corrections.

This was offset by an accelerating rise in new money, which totalled 9 billion Swiss francs over the year, and 6 billion in November and December alone, it said.

Chief Executive Philipp Rickenbacher said some of that growth was down to inflows from Credit Suisse, which is battling to restore its reputation and boost profitability after a string of scandals.

"Did we profit from Credit Suisse? I think on a net basis obviously there are a number of inflows from clients, but nothing out of the ordinary," he told journalists after the bank reported earnings.

Net new money flows were distributed worldwide and "all our key markets have contributed to that," he added.

Julius Baer shares were up 2% in early Swiss trade.

'SUSTAINABLE'

Rickenbacher, who has been in the bank's driving seat since 2019, said Thursday's figures offered evidence of "sustainable profit growth across market cycles", adding that the bank has achieved all its financial goals in the three years that ended in December.

The tougher market conditions of 2022 led to the bank reporting a 15% drop in net commission and fee income, with clients cutting back on activities.

But the bank was able to gain from the U.S. Federal Reserve and other major central banks hiking interest rates, with net interest income going up by 31%.

Analysts reacted positively to the numbers.

"Overall, we see the FY22 result as strong," said Zuercher Kantonalbank analyst Michael Klien. Vontobel analyst Andreas Venditti described the results as "solid."

($1 = 0.9071 Swiss francs)

(Reporting by Noele Illien, editing by Rachel More and John Stonestreet)