Thursday, February 2, 2017

Private Banking: "Julius Baer’s Singular Model Gets One Up On UBS"

From Lipper Alpha Insight:
Julius Baer’s pure play approach to private banking is showing up its biggest competitor.

Switzerland’s third-largest wealth manager pulled in more net new money in percentage terms than industry leader UBS in the second half of the year. Baer’s simpler proposition is a big attraction.

The bank run by Chief Executive Boris Collardi has some similarities with UBS. If anything, Julius Baer is probably more exposed to the U.S. dollar: almost half its assets are in that currency, with less than a tenth of expenses in Swiss francs. That could be a boon: a 10 percent rise in the greenback’s value against the Swissie could lift Baer’s annual underlying pre-tax profit by 16 percent, Deutsche Bank analysts estimate. But it cuts both ways. UBS has said its 2017 underlying pre-tax profit could rise or fall by 9 percent for a given 10 percent shift in this exchange rate.

Changing attitudes to private banking secrecy are bad news for both. So far, UBS seems to be feeling more pain, with outflows of 4.1 billion Swiss francs outside of the Americas in the three months to December....MORE