The bank set new performance targets, suggesting that the competitive environment for private banks, particularly in a time of economic turbulence and technological acceleration, remains challenging.
Julius Baer targets gross savings of 120 million Swiss francs ($122.9 million) by 2025 by “streamlining” its geographic footprint and market coverage as well as using technology and “agile” working methods “, he said yesterday.
The Zurich-listed bank said in a statement that it wants to focus more on penetrating discretionary mandates to earn more recurring revenue — a sign of how these firms are aiming for more stable revenue streams, especially in markets. volatile economic conditions.
From 2023 to 2025, Julius Baer plans additional investments in technology totaling approximately CHF 400 million. The increased costs involved will partly offset the targeted cost savings of 120 million Swiss francs mentioned above.
“In an acceleration of its core market strategy, Julius Baer will place particular emphasis on scaling its business where the opportunities to generate critical mass and exponential earnings growth are greatest,” said said the bank.
The announcement did not seem to reassure investors. The bank’s shares fell 6.4% around 2:00 p.m. Swiss time to SFr45.52 per share. The broader Swiss index fell around 2.5%.
In Europe, Julius Baer will leverage its onshore presence in Germany, the UK and the Iberian Peninsula, as well as its position in the domestic Swiss market. It will continue to serve the Asia-Pacific market from Singapore and Hong Kong, and will strengthen its presence in Brazil, the Middle East and India.
Along with recruiting and developing local talent, Julius Baer said mergers and acquisitions – in a “disciplined approach” – will be drivers of growth.
The company will pursue its growth in these markets in three ways. Firstly, by recruiting the best talent, returning to a positive net number of hires for employees in contact with customers (customer relations managers and their assistants, investment and wealth advisors). Secondly, Julius Baer will push the development of his internal talents from start to finish. And third, it will seek to grow through a disciplined approach to mergers and acquisitions, building on its proven track record of creating value-creating transactions and successfully integrating them.