The Julius Baer banking group in Zurich has announced a siginificant fall in profit for the first six months. Net profit was SFr138 million ($81.32 million), some 45 per cent lower than for the comparable period last year.
The group said on Friday the result was attributable mainly to a decline in transaction-related earnings, as well as to a rise in operating expenses.
Assets under management at mid-year 2001 totalled SFr141 billion.
The group said that net income from trading registered a fall of 42 per cent in the first half of 2001 to SFr64 million, compared with SFr110 million in the year-earlier period.
Results for foreign exchange trading were up 13 per cent at SFr61 million, while securities trading activities posted a positive result of SFr22 million.
Operating costs at the bank were up by seven per cent at SFr504 million.
The group said that in view of recent developments, it had taken various steps to cut costs. These include a freeze on new recruitment and a 12-month period during which staff and other operating expenses would be cut back by SFr35 million.
It added that savings of roughly SFr60 million per year could be expected. Together with other measures, the savings should reduce operating expenses by at least SFr80 million a year.
The bank said that for market and profitability reasons, the project of an online platform for investors was not for the time being to be pursued in its planned form.
The statement added that the group did not expect the prospects for online brokerage to improve soon. However, individual platform components would be used within the group.