Unlock the Editor’s Digest without cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
Switzerland’s monetary regulator has opened enforcement proceedings towards Julius Baer, the most recent hit to the Swiss wealth supervisor from its publicity to failed property group Signa.
Finma stated on Monday that it had notified Julius Baer of the “opening of proceedings” following “prolonged and rigorous investigations”, casting a shadow over its new chief government, Stefan Bollinger, who’s in search of to engineer a turnaround of the scandal-hit financial institution.
Finma doesn’t have the ability to advantageous lenders, however below a proper enforcement process it could actually reprimand corporations, confiscate income or take away banking licences.
It comes after Julius Baer was final yr compelled to write down down its full SFr606mn ($670mn) publicity to Signa, the closely indebted property empire of René Benko which collapsed in 2023.
The Swiss financial institution and wealth supervisor stated on Monday that it was topic to “regulatory enforcement assessments” by Finma relating to its Signa-related losses.
Shares in Julius Baer fell greater than 13 per cent following the publication of the group’s annual outcomes on Monday, which analysts described as “disappointing” due to a scarcity of element about its technique to spice up development.
The financial institution additionally introduced plans to chop 400 jobs, or about 5 per cent of its workforce, as a part of a cost-cutting drive below Bollinger, a former Goldman Sachs banker who joined the Swiss lender final month.
“That is the primary transfer to create a leaner, extra simple approach of operating our enterprise. We’re going to apply the identical ideas by all the organisation,” Bollinger stated of the adjustments.
The financial institution’s cost-income ratio for 2024 got here in at 71 per cent, which it described as “nonetheless unsatisfactory”. Bollinger is focusing on financial savings of SFr110mn by the fee discount programme.
The financial institution stated that it could additionally shrink its government board from 15 members to 5 in a revamp of its management group. Final week, the group’s chair Romeo Lacher stated he would step down at its annual assembly in April, paving the way in which for a management overhaul.
“A brand new management construction and a leaner government board will enhance accountability,” Bollinger added.
The financial institution posted annual income of SFr1.02bn for 2024, greater than double the earlier yr when it was hit by losses associated to Signa. Belongings below administration jumped 16 per cent to SFr497bn.
The financial institution stated it could current a method replace, together with new medium-term targets, earlier than the summer time.
Concerning the Finma proceedings, Julius Baer stated: “We pursue the precept of clear and energetic co-operation with the competent authorities. For principal causes we can not present any additional info on ongoing co-operation and/or proceedings.”
