ZURICH: Swiss private bank Julius Baer will buy back up to 500 million Swiss francs of shares and raise its dividend, it said on Monday, returning excess capital to investors after an unsuccessful acquisition hunt.
Switzerland's biggest listed dedicated wealth manager said it was able to increase net profit by 6 percent and attract 9 billion Swiss francs ($9.43 billion) net new money in 2010, even as the franc's unprecedented strength against the euro ate into client assets and profitability.
Baer, which in May completed the integration of ING's Swiss private banking assets it bought in 2009, had been holding large amounts of capital as it sought a new target, but without success.
"Whilst our results were impacted by the Swiss franc appreciation, our group nevertheless showed a pleasing financial performance, allowing an increased proposed dividend and the launch of a buyback programme in due course," said Chief Executive Boris Collardi.
New assets from the acquisition of ING and client money inflows at the top end of Baer's target more than made up for a strong Swiss franc rally against the euro and the dollar wiping 14 billion francs off assets under management.
But the rise of the Swiss currency to unprecedented levels last year also pressured margins. Most of Baer's costs are booked in francs, while much of its operating income is in foreign currencies.
Julius Baer raised its Tier 1 ratio of 23.8 percent at the end of the year, showing a very stable capital position and cash to spare, giving it an ample buffer to forthcoming bank capital rules from the Swiss regulator.
The big integrated banks UBS and Credit Suisse will also be under pressure to show they can deliver decent investment banking profits, even after cutting back risky but potentially very profitable proprietary trading.
They are due to publish results on Tuesday and Thursday.
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