Julius Baer falls after guidance cut

Vontobel Holding AG

20/11/2023 08:23

** Shares in Julius Baer  BAER.S  are down 7% after the
Swiss private bank dampened profit expectations after it booked
valuation adjustments of 82 million Swiss francs ($92.60
million)
    ** The company said it currently does not expect the full
year 2023 net profit level to match the one achieved in 2022 due
to a rise in credit provisions and a tax rate increase
    ** "The last four months have been difficult for Baer, with
margins under pressure, elevating cost income, with ongoing
deleveraging weighing on flows", Keefe, Bruyette & Woods Europe
writes
    ** The brokerage flags that the provision is slightly higher
than it would have hoped and shines a light on risk management
at Baer (over-exposure to one client)
    ** "While some of this negative was to be expected, the
update is much weaker than anticipated and should lead to
another round of consensus earnings downgrades," it adds 
    ** Jefferies says that whilst credit hit looks manageable, 
risk management questions seem inevitable
    ** "investors may well question how — if indeed it is
confirmed to be the case — a single client has resulted in such
a substantial credit provision being taken and whether there
could be other outsized single client exposure" - Jefferies


  


($1 = 0.8855 Swiss francs)

 (Reporting by Mateusz Dobrzyniewski)
 ((Mateusz.dobrzyniewski@thomsonreuters.com))