FX.co ★ Julius Baer profit slumps

The end of 2019 proved to be rather difficult for Julius Baer Group Ltd, a Swiss banking group. Its annual net profit fell by 36.8 percent, or 1.6 times, to 465 million Swiss francs from 735.3 million Swiss francs in 2018.

The only positive aspect of the previous year was that the company's assets rose by 12 percent to 426 billion Swiss francs.

Julius Baer's operating profit inched up to 3.383 billion francs compared to the year of 2018, while the company's net interest income decreased by 2 percent.

According to the currency strategists at Julius Baer, the decrease in net revenues in 2019 was due to the provision of cash subsidies. The Swiss private bank set aside 153 million Swiss francs to settle claims lodged by the German agency BvS. Besides, the amount of 99 million francs spent on writing off the assets of Kairos, the bank's subsidiary, hit earnings.

The significant contraction in profits forced the banking group to review its current expenditures, cutting costs by 200 million Swiss francs ($208 million) for the next three years. Previously, the company planned to cut costs by 100 million francs, but the existing situation made adjustments. Moreover, Julius Baer Group intends to shed 300 jobs this year.