Swiss private banking group Julius Baer’s assets under management (AuM) climbed to CHF422bn in the first ten months of this year, a 10% year-to-date increase.

The bank attributed the rise to positive market conditions and net new money inflows.

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However, the company also noted that its 2019 full-year result will be hit due to impairment related to its Italian subsidiary Kairos.

Earlier this year, Julius Baer carried out a strategic review of the underperforming subsidiary and called for closer cooperation to revive Kairos’ financial health.

The Swiss firm estimates that the new business plan, along with related outflows at Kairos, will have a non-cash impact of around CHF99m.

In the first ten months, the annualised net new money growth rate at the group was less than 3%. The figure is slightly less than the growth rate of 3.2% registered in the first half of 2019.

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Net new money was affected by ongoing outflows from Kairos funds and clients exiting due to client documentation review project. However, strong inflows from Julius Baer wealth clients domiciled in Asia, Europe and the Middle East supported the growth.

Due to the dull growth, the group is unlikely to achieve its medium-term target this year, Julius Baer noted.

The adjusted cost/income ratio during the ten-month period stood at over 70%. The company now aims to reduce the ratio below 68% in 2020, as part of its cost-reduction programme.

The Julius Baer board also approved a programme to buy back up to CHF400m of its shares.

The programme will be launched tomorrow and run till February 2021.

Julius Baer Group CEO Philipp Rickenbacher said: “Our strong financial position enables us to put in place a share buy-back programme as an additional way to return capital to our shareholders.

“At the same time, the organisation is moving towards a more agile structure, in line with our announcement early October, and the leadership team is working on our strategic plans to deliver sustainable medium-term growth.”