Tom Burroughes, Group Editor, Wealth Briefing

Julius Baer said today that assets under management at the end of 2012 hit a record of SFr189 billion ($296.8 billion), a rise of 11 per cent over the previous 12 months as a result of stronger markets, SFr9.7 billion of net inflows and a slightly negative currency effect.

The Zurich-listed bank reported on its full-year figures for 2012 after last week announcing it had started the process of transferring assets acquired from the non-US wealth business it had acquired from Bank of America Merrill Lynch.

Total assets under management, including assets under custody, rose by 7 per cent to SFr277 billion, it said in a statement.

Operating income decreased by 1 per cent year-on-year to SFr1.737 billion, while average assets under management rose 8 per cent, resulting in a gross margin of 96 basis points (2011: 105bps). The lower gross margin was a direct consequence of a further reduction in client activity, the firm said.

Adjusted operating expenses fell by 5 per cent to SFr1.216 billion as the expenses in 2011 included the one-off tax-related Germany payment of €50 million (SFr 65 million). Excluding the 2011 Germany payment, the adjusted operating expenses were flat.

The bank said its adjusted cost/income ratio rose to 71 per cent (2011: 68 per cent).

Adjusted net profit including the 2011 Germany payment increased by 8 per cent to SFr433 million and adjusted earnings per share (EPS) by 11 per cent to SFr2.14 per share.

At the end of 2012, the group’s BIS total capital ratio stood at 31.6 per cent and its BIS tier 1 ratio at 29.3 per cent, helped by the pre-funding of the acquisition of Merrill Lynch’s International Wealth Management business outside the US.

The principal closing of the BoA Merrill IWM business acquisition took place on 1 February, as announced earlier. As a first step of the integration, Julius Baer acquired the Geneva-based Merrill Lynch Bank (Suisse) with AuM of around SFr11 billion, taking Julius Baer’s AuM above the SFr200 billion mark for the first time.

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