Bank Julius Baer is pursuing a growth strategy that has seen it launch a joint venture (JV) in Thailand and unveil a new unit for the intermediaries market, comprising external asset managers: EAMs and financial advisors: EFAs, while its product and service offering performed well aided by a number of technology advances.
Instruments such as real estate investment trusts (REITS), a partnership with Nomura in Japan, and events to encourage organic growth won the bank Most Effective Investment Service Offering at the PBI Global Wealth Summit & Awards and a Highly Commended nod for Outstanding Private Bank for Growth Strategy.
Bank Julius Baer is targeting Asia for growth via its various Singapore, China & Hong Kong, India and Indonesian offices, while not forgetting Non-resident Indian (NRI) populations or emerging countries, such as the Philippines and Thailand. Its JV with Siam Commercial Bank created SCB Julius Baer on 25 April 2019. It now has 1400 staff in Asia, 21% of its workforce.
A 5% stake in NYSE-listed Jupai Holdings Ltd, a Chinese third-party wealth management (WM) service provider gives it insight and further growth potential in that market, while the creation of Julius Baer Nomura Wealth Management Ltd in Japan in late 2018, after Nomura acquired 40%, expands its base bringing international mandate and bespoke discretionary services to their high net worth (HNW) clients.
Strategic partnerships in other parts of the world with Macquarie and Bank of America Merrill Lynch allow it to provide their HNW individuals (HNWIs) with financing and investment solutions to go beyond traditional WM.
The specialised Investment Management (IM) and Markets and Advisory Solutions (AS) units, respectively spot multi-asset risk opportunities and defenses, and provide effective wealth planning. The latter’s Market Outlook events and Alpha Conferences, plus its Young Partners programme, showcase valuable insights from leading fund managers and drive organic growth. The Next Generation content marketing platform also communicates thought leadership to clients, particularly around the bank’s present key themes:
Feeding the world,
& Shifting lifestyles.
The bank created a new front unit for intermediaries and global custody in January 2019 to offer their range of wealth planning, product structuring, connectivity and execution services to the clients of EAMs and EFAs. This business-to-business (B2B) strategy, aided by the firm extensive reports, advice and WM data, will support intermediaries along their entire value chain and is an important additional market to the firm’s organic growth efforts.
The intermediaries franchise in the bank’s home market of Switzerland is growing as demand for value-adding information services rises, thereby increasing mandate penetration. The same pattern is evident across Europe, Latin America and Asia. Net new money inflows markedly improved year-on -year (YOY), contributing to higher assets under management (AUM) and rising revenues.
Adjusted net profits after tax of CHF772 million (US$847m) were achieved in 2019 and an International Financial Reporting Standards (IFRS) net profit of CHF465m. AUM of CHF426 billion, an increase of 12%, was reported.
The balance sheet on 31 December 2019 for Julius Baer showed a healthy Bank for International Settlements (BIS) total capital ratio of 22.1% and a BIS CET1 capital ratio of 14.0%, well above the Group’s own floors of 15% and 11% respectively, and exceeding the minimum regulatory requirements of 12.4% and 8.2%, respectively. The resulting substantial capital buffer provides it with room to steer, grow and develop its business, although obviously the impact of Covid-19 is significant for the entire industry and everyone’s forward planning.
On the technology front, Julius Baer has made improvements to its trading apps and platform, allowing relationship managers (RMs) to more easily and effectively execute a variety of foreign exchange (FX) and structured product trades, and simply personalise information for clients.
Over the last five years, the bank has invested over CHF1bn in technology for the Group. A new core banking system was implemented in 2018, which improved Group operational efficiency, scalability, and flexibility in the back office. It has also made it easier to introduce new fintech-enabled front-end apps and tools – whether they’re developed internally or externally. The Hong Kong and Singapore offices, for instance, are now getting new functionality running on this back office foundational stone, with local tools further automating discretionary mandate solutions.
The bank has invested in the following digital initiatives and tools to enhance the client experience (CX) and support the front-office:
- New e-/mobile banking application for Asia, with soft token login capabilities.
- Customisable dashboard to improve data presentation.
- Secure email channel to communicate with the bank across multiple devices.
- Triple A Plus (TAP) is a new portfolio management system that provides improved capabilities for the Asia Investment Management (AIM) business. It acts as a foundation stone for future enhanced performance reporting capabilities across all portfolios.
- A new Anti-Money Laundering System (AMLS) has significantly strengthened compliance and control systems.
Taurus Wealth Advisors achieved Highly Commended (HC) status in the • Most Effective Investment Service Offering category at the Private Banker International (PBI): Global Wealth Summit & Awards 2020, as did Kasikornbank, because there were a lot of noteworthy entrants.