Julius Baer Group Ltd (BAER) Q2 2026 Earnings Report

The call presented a strong operational and financial performance: record AUM and record half-year net profit, robust revenue growth, expanding gross margins, tangible cost savings and a materially stronger capital position. Key strategic and technology initiatives are underway and RM recruitment pipelines are active. Offsetting these positives are near-term headwinds from the deliberate derisking and revised risk & compliance framework that will depress flows into 2027, some H2 cost buildup related to investments, isolated credit write-offs and regional recruitment challenges. On balance the positive financial outcomes and capital resilience significantly outweigh the near-term execution and derisking challenges.

The call reiterated that net new money for 2026 will be below 2025 and that the headwind from the revised risk & compliance framework will carry into 2027 (normalising in 2028), while management reconfirmed mid‑term targets including a sustainable cost/income ratio below 67% by 2028 and forward tax guidance of 18–20%; dividend policy remains unchanged with a c.50% payout ratio. Key metrics cited: AUM CHF 547bn (+5% YTD) with monthly average AUM CHF 526bn (+7%), total client assets ~CHF 650bn, net new money CHF 5.7bn (2.2% annualised), operating income CHF 2.276bn (+12%), record H1 net profit CHF 673m (like‑for‑like +32%), gross margin ~87 bps (exit May–Jun 80 bps; recurring 37 bps, activity‑driven 27 bps, interest‑driven 23 bps), costs CHF 1.462bn (+2%) and a H1 cost/income of 62.6% (management expects H2 cost/income <67% given an 80 bps gross margin input), CET1 ratio 18.5% (CET1 CHF 4.3bn, RWAs CHF 23.3bn), Tier‑1 leverage ratio 4.7%, LCR 344%, loan‑to‑deposit 61%, balance sheet ~CHF 117bn (+8%), client deposits CHF 72bn (+8%), loans CHF 44bn (+5%) (Lombard CHF 36bn +7%), treasury book CHF 18bn (+15%), FX swap book ~CHF 27.5bn, credit losses CHF 23m, RM headcount 1,247 with ~120 hires expected in 2026 (31% of RMs on business cases; business case achievement ~69%), plus CHF 60m gross run‑rate savings implemented and CHF 11m fiscal‑year savings already benefiting the P&L.