Baosheng Group's 2025 Profit Declines 25%, Loan Losses Surge, Brazil Business Exit Drags on Performance

Investing.com - Julius Baer Group Ltd. announced on Monday that its net profit for fiscal year 2025 declined by 25%, due to a surge in loan losses, the reversal of a one-time tax benefit that boosted earnings in 2024, and a 99 million Swiss franc expense from the sale of its Brazilian operations.

Net profit under International Financial Reporting Standards (IFRS) fell from 1.02 billion Swiss francs to 763.8 million Swiss francs. The previous year’s figures included a 144.6 million Swiss franc tax reserve release related to Swiss corporate tax audits covering 2017 to 2022, which compressed the 2024 adjusted tax rate to 2.9%. The tax rate is expected to return to a normal level of 16.6% in 2025. Pre-tax profit decreased by 11% to 938 million Swiss francs.

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Net credit losses surged from 14.8 million Swiss francs to 212.5 million Swiss francs, mainly driven by increased provisions for mortgage books and remaining private debt investment portfolios.

The group completed a “comprehensive credit review” in November and decided to reduce its revenue-generating real estate mortgage business that no longer aligns with the revised banking strategy.

Net interest income dropped 67% to 124.9 million Swiss francs, from 1.37 billion Swiss francs, with interest income from loans decreasing from 1.37 billion to 961.9 million Swiss francs.

Net income from financial instruments measured at fair value increased by 25% to 1.61 billion Swiss francs, benefiting from bond swap income and structured product activities during market volatility triggered by the US tariff announcement in April. Net commissions and fees rose 5% to 2.31 billion Swiss francs.

Driven by a net inflow of 14.4 billion Swiss francs, assets under management grew 5% to a record 521 billion Swiss francs.

As of the end of 2025, the group had 1,262 client relationship managers, down 118 from the end of 2024. Its flagship equity incentive plan for the 2023-2025 cycle had a payout multiple of 0.092, with a maximum of 1.5 times, due to the group’s total shareholder return lagging the STOXX Europe 600 Banks Index by 147.4%. The group stated that no further grants are expected under this plan.

CEO Stefan Bollinger said that Julius Baer has become “a stronger, leaner organization, firmly focused on our future as a pure wealth management company.”

The Common Equity Tier 1 (CET1) capital ratio stood at 17.4%, compared to 17.8% a year earlier. Total equity increased 6% to 7.23 billion Swiss francs. Adjusted cost savings reached 130 million Swiss francs, exceeding the target of 110 million Swiss francs.

Swiss regulator FINMA is conducting a “comprehensive supervisory enforcement procedure” regarding the 2023 private debt lending incident. The group proposed to pay a dividend of 1.50 Swiss francs per share for 2025, and 1.30 Swiss francs per share for 2024. The annual general meeting is scheduled for April 9, 2026.

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