Julius Baer Gruppe AG

Reported operating income was CHF 2.276 billion, up 12% year on year. Net commission and fee income rose 12% to CHF 1.279 billion, net interest income rose 80% to CHF 130 million, and net income from financial instruments at fair value through profit and loss increased 9% to CHF 876 million. Costs were CHF 1.462 billion, up CHF 36 million or 2%, and net profit reached a record CHF 673 million, a 32% like-for-like increase year on year. Gross margin expanded to 87 basis points from just over 83 basis points, the cost/income ratio improved to 62.6%, and CET1 increased to 18.5%. For the balance sheet, AUM rose 5% to CHF 547 billion, net new money was CHF 5.7 billion, client deposits were CHF 72 billion, loans were CHF 44 billion, and the loan-to-deposit ratio was 61%. Guidance-wise, management reiterated net new money for 2026 will be below 2025, expects the derisking impact to spill into 2027, and said the situation should normalize in 2028; they also said the cost/income ratio should be below 67% in the second half and remain sustainably below 67% by 2028.

Stefan Bollinger framed the half as “intense but highly productive,” emphasizing exceptional client activity, especially in Q1, and saying the results show the depth of Julius Baer’s capabilities. He stressed execution across the five strategic pillars: growth, efficiency, risk and compliance, technology, and people. His tone was confident but disciplined, repeatedly noting that derisking is a short-term drag intended to improve the quality and sustainability of the book over time.

Evie Kostakis gave a detailed readout of the financial drivers: operating income of CHF 2.276 billion, costs of CHF 1.462 billion, gross margin of 87 basis points, and net profit of CHF 673 million. She highlighted operating leverage, with costs up only 2% versus 12% revenue growth, but warned H2 costs will rise due to Swiss platform investment, higher cost-to-achieve spending, and RM hiring; she expects second-half cost/income to be below 67% and cost-to-achieve to more than double from CHF 7 million in H1. On capital and liquidity, she cited CET1 capital of CHF 4.3 billion, CET1 ratio of 18.5%, Tier 1 leverage ratio of 4.7%, and LCR of 344%, while also noting the dividend policy remains unchanged.

Analysts focused on the size and duration of derisking, RM hiring, cost discipline, regional flow trends, and the outlook for recurring and interest-driven margins. Management said the revised risk and compliance framework will continue to weigh on net new money into 2027, but should normalize in 2028; it is too early to quantify the 2027 impact, though the company expects some positive effect from growth initiatives already in 2027. They also said RM hiring should be around 120 in 2026, with a slight net increase in the RM population by year-end, and that Asia and Western Europe both remain important contributors, with Asia viewed as a long-term opportunity despite current regulatory noise.