2005 Annual Report Julius Baer Holding Ltd. - GAM Holding AG

Consolidated financial results
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and CHF 78 million or 5% to the Corporate
Center.
Net interest income was affected by significant
flattening of the yield curves,
causing a further general narrowing of
margins, and amounted to CHF 128 million.
Results from commission and service fee
activities came to CHF 1.1 billion. This
total consists of CHF 1.3 billion of commission
income on securities and investment
transactions, plus CHF 21 million
of commission income on other services,
minus CHF 229 million of commission
expenses. All in all, 88% of commissions
earned were value-based and 12% transaction-based.
The commission and service
fee activities of the Julius Baer Group
thus proved once again to be the most
decisive and stable source of income.
Results from trading operations totaled
CHF 149 million.
The CHF 95 million of other ordinary
results was largely attributable to recognition
of the CHF 61 million of proceeds
from the sale of Private Banking USA,
the CHF 5 million investment in Kepler
Equities SA recorded in the balance
sheet as a financial investment as well
as to the release of provisions and
accruals relating to prior years.
Expenses marked by one-time
integration costs
The operating expenses of the Julius
Baer Group amounted to CHF 1.3 billion
in 2005, of which personnel expenses
accounted for CHF 839 million, including
CHF 78 million relating to integration
measures. Included in the personnel
expenses are CHF 282 million of bonus
accruals, CHF 38 million of costs relating
to stock- and option-based participation
plans and CHF 14 million relating to staff
participation plans. The performancebased
compensation components from
operating business thus accounted for
34% of personnel expenses. The number
of employees (FTE) at the end of 2005
was 3 427, of which 1 646 worked for
the three private banks and GAM. General
expenses amounted to CHF 326 million
or 25% of total expenses. This figure
includes integration costs of CHF 63 million.
Depreciation and write-offs of noncurrent
assets together with valuation
adjustments, provisions and losses
amounted to CHF 150 million, with CHF
47 million of this amount resulting from
integration measures.
Net profit before taxes was CHF 189 million,
and after deducting CHF 44 million
of taxes net profit amounted to
CHF 145 million. For the shareholders