Julius Baer Chair Promises Return to Pure-Play Roots
Noel Quinn, Julius Baer’s newly elected chairman, said the Swiss private bank will return to its core purpose as a pure-play wealth manager after a «strategic drift» in recent years towards corporate banking.
In a strategy update presentation, Julius Baer chairman Noel Quinn spoke about a future that would see the Swiss private bank change course back to pure-play wealth management after recent woes, most notably the 586 million Swiss francs ($711 million) write-off last year related to the collapse of René Benko’s Austrian property group Signa.
«The financial performance has been inconsistent and volatile and not what you would expect from a pure-play wealth manager. A root cause of that volatility, in my view, has been strategic drift over recent years,» said Quinn, HSBC's former CEO who became Julius Baer’s chairman in May.
«A few years ago, the business expanded its product offering into lending to clients that were invested in long-term fixed assets as the primary source of the client's wealth. In my view, those clients and the transactions that followed were more aligned to corporate banking than to wealth management or private banking.»
More Stable Financial Performance
According to Quinn, the bank will «revert to a strategic perimeter for Julius Baer that aligns with a wealth manager, not a corporate bank». This shift in focus back to the core wealth management business is expected to lead to more stable financial performance.
«The inherent returns of the core business are very strong at around 30 percent return on CET1 (Common Equity Tier 1). So, capital generation potential of the business is excellent,» Quinn explained. «However, there has been inconsistency in the growth story of Julius Baer, its cost management story and the broader risk and compliance track record. These inconsistencies need to be addressed.»
The presentation followed Julius Baer's announcement of its new strategy with financial targets for 2026 to 2028, including 4-5 percent net new money growth, a cost/income ratio of less than 67 percent and at least 30 percent of adjusted return on CET1 capital.
