Julius Baer to return £325m to shareholders in buyback

SWISS private bank Julius Baer will buy back up to Swfr500m (£325m) of shares and raise its dividend, returning excess capital to investors after an unsuccessful acquisition hunt.

“There is nothing to say we won’t make further share repurchases unless we do an acquisition and use the capital for that,” chief financial officer Dieter Enkelmann said yesterday.

Switzerland’s biggest listed pure-play private bank said it increased net profit by six per cent and attracted Swfr9bn of net new money in 2010, even as the franc’s strength against the euro ate into assets and profits. Full-year profit declined 9.3 per cent to Swfr353m in 2010 from Swfr389m a year earlier. Assets under management fell to Swfr170bn at the end of 2010 from Swfr175bn two months earlier, partly because of gains in the Swiss currency against the dollar and euro.

“We have regained momentum in the second half and we are hoping to continue this momentum into 2011,” said chief executive Boris Collardi, adding that currency volatility remained one of the major challenges facing the private bank this year.

The impact of Swiss franc strength on profits and on client assets will be the focus this week as results come in from Swiss banking heavyweights UBS and Credit Suisse.

“We would expect UBS and Credit Suisse this week to see similar trends in private banking: healthy net new money but weak revenue and higher costs,” said Nomura in a note.