Julius Baer Unveils New Financial Targets and Strategy
Zurich-based Julius Baer has announced an updated strategy to meet new financial targets including the goal of improving asset inflows and cost efficiency.
Julius Baer has announced new medium-term financial targets for the upcoming cycle from 2026 to 2028, according to a statement.
The goals include improving net new money growth to 4-5 percent and adjusted cost/income ratio to less than 67 percent by 2028. The bank also aims to achieve at least 30 percent in adjusted return on Common Equity Tier 1 capital during this period.
«We now have a clear strategic agenda and priorities to capture future opportunities. I am excited as we embark on the next chapter of our transformation, and the team and I are fully committed to disciplined execution on our mid-term targets,» said Julius Baer CEO Stefan Bollinger.
Profitable Growth in Wealth Business
Julius Baer outlined a number of initiatives to obtain «profitable growth» in its core wealth management business and meet its new ambitions.
This includes sharpening segmentation and coverage, enhancing the product offering, strengthening top positions in core geographies and increasing front productivity. It will prioritize and focus on delivering distinct client solutions for its high net worth and ultra-high net worth (UHNW) client segments across geographies to meet its net new money target.
Improving Cost Efficiency
On costs, the bank will implement further efficiency measures amounting to 130 million Swiss francs ($159 million) by 2028 by completing the ongoing optimization of the company’s operating model, process and IT simplifications. It will also apply cost discipline with emphasis placed on streamlining non-personnel expenses.
This is in addition to the gross cost savings target of 110 million francs previously announced in February as part of a 2023-2025 cost program that is expected to be exceeded by around 20 million francs.
Risk and Compliance Management
Julius Baer also highlighted a tightening of risk and compliance management with «the calibration of its risk profile in line with the perimeter of its core wealth management business, a strengthened first line of defense and a culture of disciplined risk ownership».
A new risk organization is being established under the leadership of current chief credit officer Ivan Ivanic who was appointed in May as the chief risk officer, effective July 1, replacing Oliver Bartholet who will retire from the bank at the end of the year.
The announcement of the appointment was part of a four-month interim management statement that saw a net charge of 130 million francs for loan loss allowances linked to the private debt and mortgage book.
Bollinger's First 20 Weeks
Various efforts are already in play under the leadership of Bollinger who became the fresh CEO of the bank in January as well as ex-HSBC CEO Noel Quinn who was elected as board chair in May.
Over the past 20 weeks, Julius Baer implemented several measures, including a reorganization that saw a reduced executive board, a streamlined regional setup and the formation of a new global wealth management committee and global products & solutions unit. It bolstered risk management with the new organization and leadership of Ivanic. It also sharpened the business with additional cost measures, a new front operating model, a new UHNW competence center, the exit of the Brazil onshore market and an onshore entry into Italy.
«Since January, we have made a lot of progress on multiple fronts aimed at strengthening our organization and the trust of all our stakeholders. The last 20 weeks only reinforced my conviction in the uniqueness of this franchise, the high quality and commitment of our employees, as well as the significant underlying business potential,» Bollinger said.
