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    Nicholas Herman

    Research Analyst at Citigroup Inc.

    Nicholas Herman's questions to Julius Baer Group (JBAXY) leadership

    Nicholas Herman's questions to Julius Baer Group (JBAXY) leadership • H1 2023

    Question

    Nicholas Herman of Citigroup Inc. asked about the future profile of net new money flows and their dependency on market conditions. He also sought clarification on why NII performance was strong despite deleveraging and what is needed to drive an increase in the recurring fee margin, which has been flat.

    Answer

    CEO Philipp Rickenbacher noted that the timeline for new RMs to build their portfolios remains 3-4 years and that improved market conditions are important for client confidence and wealth generation. CFO Evie Kostakis explained that the interest-driven income outlook is stable but could be influenced by factors like re-leveraging. She highlighted the May/June recurring margin exit rate of 37 bps as a positive sign, calling the path to the target a "slow grind."

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    Nicholas Herman's questions to Julius Baer Group (JBAXY) leadership • Q4 2022

    Question

    Nicholas Herman inquired about disaggregating H2 net new money trends, the drivers behind the increased discretionary mandate penetration, and the current market dynamics for M&A, including whether buyer and seller price expectations are converging.

    Answer

    CEO Philipp Rickenbacher stated that 2022's net new money growth was broad-based and not reliant on idiosyncratic events. On M&A, he noted that while activity has been low, the fundamental pressures on smaller players persist, and Julius Bär is ready to act. CFO Evie Kostakis added that the increase in discretionary mandate penetration is part of a long-term goal to raise the recurring fee margin, with the full effect expected to be back-ended in the strategic cycle.

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    Nicholas Herman's questions to Julius Baer Group (JBAXY) leadership • Q2 2022

    Question

    Nicholas Herman of Citigroup asked for several financial clarifications, including the exit Net Interest Margin (NIM) and the impact of recent rate hikes, the drivers of the decline in the recurring fee margin, and the year-over-year change in variable compensation. He later followed up on the M&A environment, asking if the market drawdown was creating more opportunities with smaller managers.

    Answer

    CFO Evie Kostakis confirmed the May-June exit NIM was around 18 basis points and stated the recurring fee margin decline was mainly due to divestments. She also noted variable compensation was down CHF 22 million year-over-year. On M&A, CEO Philipp Rickenbacher responded that while transaction activity is currently slow, he expects materially better opportunities in the coming years as market pressures on smaller players increase.

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    Nicholas Herman's questions to Julius Baer Group (JBAXY) leadership • Q4 2015

    Question

    Nicholas Herman of Citigroup asked about the progress of the CHF 100 million efficiency program, regional performance in net new money, the impact of margin calls, and the outlook for the gross margin given new targets and the 'Your Wealth' initiative.

    Answer

    CFO Dieter Enkelmann confirmed that over CHF 60 million of the efficiency savings were realized in 2015, with an incremental CHF 40 million expected in 2016. He noted net new money development was volatile but not unusual. CEO Boris Collardi added that margin calls were handled extremely fast and were not a cause for concern. Regarding the gross margin, management indicated the main driver remains client activity, which is hard to forecast.

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