Julius Bàr tumbles following disappointing net new money inflows

Julius Bàr shares plunged almost 10% at one point in Zurich on Friday, after the private bank released its interim management statement for the first four months of the year. The report highlighted net new money of CHF 3 billion, representing an annualized growth rate of 1.7%, significantly trailing the CHF 5.3bn consensus estimate.

"Inflows were impacted by tightened risk and compliance screening, geopolitical uncertainty surrounding the Middle East conflict, and a 'pause' in client releveraging," Jefferies explained in its reaction note.

Despite the disappointing headline figure, the US broker characterized the update as "exceptional, driven by a better activity-led gross margin (90 basis points) and solid cost discipline, with a cost/income ratio of 62%."

"Julius Bàr cautioned that activity levels slowed significantly in April compared to the first quarter of 2024, but this update clearly positions the bank well for the first half and the full year," added Jefferies, which maintains a "Hold" rating on the stock.

The Swiss institution also reported a highly liquid balance sheet and a robust capital position, with its CET1 ratio improving further to 18.1% at the end of April, up from 17.4% at the end of 2023, remaining well above regulatory requirements.