JBAXY Julius Baer Group Ltd (PK)

ZURICH—Swiss bank Julius Baer Group AG said it increased assets it manages for clients in the first half of this year, as it bulked up on staff and its overall results were bolstered by the U.K.'s vote to leave the European Union.

The bank's report Monday managed to offset a relatively gloomy outlook for the near future issued by its chief executive.

Zurich-based Julius Baer said adjusted net profit rose 5% in the first half compared with the first six months of 2015, as assets under management rose 4% from the end of last year to reach 311 billion Swiss francs ($314.9 billion).

Shares of Julius Baer were recently up 4.4%.

The bank said its underlying net trading income fell compared with the first half of last year, when volatility had risen sharply due to the Swiss central bank's surprise decision to remove a cap on the value of the franc. But the figure jumped 26% compared with the second half of last year, Julius Baer said, as trading volumes in foreign currency spiked in relation to another dramatic event in June: the U.K.'s vote to leave the EU.

The Brexit vote "has been a good, broad-based event when it comes to transaction income," Chief Executive Boris Collardi said at a media briefing. In a subsequent interview, Mr. Collardi said the bank continues to benefit from the vote's aftermath, and hopes to continue seeing clients take up related trading positions "as long as we can."

Julius Baer is narrowly focused on the business of private banking for wealthy clients, in which it strives to compete with bigger, more diversified Swiss players UBS Group AG and Credit Suisse Group AG. All three wealth managers have been challenged recently by turbulent markets, which have pushed cautious clients to let their assets remain dormant—and in turn, starve the banks of fees.

Julius Baer said net commission and fee income slipped 7% in the first half of 2016 compared with the same period last year, because of "reduced client risk appetite." Meanwhile, weakened currencies cut 4 billion francs from the value of its assets under management.

Also, like its Swiss peers, Julius Baer is increasingly burdened by the negative interest rate policy implemented by the country's central bank. That policy means that lenders keeping cash at the central bank are being charged 0.75% on deposits above a certain level. In Julius Baer's case, Mr. Collardi said, those charges amounted to 20 million francs in the first half of the year.

Mr. Collardi painted a daunting picture for his industry's near-term future.

He said market volatility should continue this year because of political events such as the U.S. presidential election. Central banks, meanwhile, have likely exhausted their ability to ease troubled markets with further interest rate cuts: "This ongoing race to the bottom in terms of interest rates has probably now reached its max impact," the CEO said.

Yet, Julius Baer's investments point to a more upbeat longer-term outlook.

The bank said it saw a 3.7% gain in net new money to manage in the first half. That increase came alongside growth in banking staff. About 50 new relationship managers joined the bank in the first half of this year, compared with 40 hired in all of last year. Julius Baer has more than doubled its number of relationship managers since 2008, to nearly 1,300, amid a series of acquisitions.

Recent difficulties encountered by Credit Suisse, which is in the midst of a fitful restructuring effort and has seen its stock price fall sharply, haven't created opportunities for Julius Baer to hire Credit Suisse bankers, Mr. Collardi said. "We're not seeing anything different now than in the past," he said. A veteran of Credit Suisse who left in 2006, Mr. Collardi said, "I regret to see" the bank in its current predicament, having embarked on a turnaround bid last year just as markets were becoming more challenging. Still, he added, "one has to make his own luck."

Julius Baer's expansion in the first half of the year helped to offset unwelcome developments in the period, including "deleveraging" among clients in Asia, or a decline in loans to clients in that key region secured by assets held at the bank.

The result also comes as Julius Baer said it has now "completed" the process of European clients pulling assets out as they declare their Swiss bank accounts to tax authorities in their home countries—which has long been a drag on Julius Baer's business.

Adjusted net profit was 402 million francs in the first half, a 5% increase from the same period in 2015, when excluding a provision of $350 million the bank made in the first half of last year to help it settle a longstanding U.S. Justice Department probe of its aiding of tax evasion among American clients.

Julius Baer later admitted to helping American clients evade taxes, and settled the matter by agreeing to pay $547 million.

Write to John Letzing at john.letzing@wsj.com

(END) Dow Jones Newswires

July 25, 2016 10:51 ET (14:51 GMT)

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