Julius Baer: Credit Book Update Coming Soon
After recording significant loan loss allowances, Julius Baer will soon unveil whether there are further damages to its credit book. This will mark ground zero for the Swiss financial institution's return to its pure-play private banking roots.
Julius Baer’s review of its credit book is continuing and expected to be completed in the next few months, according to a statement in the bank’s first-half financial results. After the previously announced 130 million franc ($163 million) write-down, largely linked to the collapse of fallen Austrian businessman René Benko’s property group Signa, the Swiss bank said that there has been no need to book further loan loss allowances.
«Once the credit review has been completed, the Group will be in a position to decide whether or not additional loan loss allowances are required,» Julius Baer said.
Risk and Compliance Overhaul
In an update announced in June, the bank unveiled a series of new targets and its strategy for the 2026-2028 cycle. In addition to financial goals and enhanced wealth management focus, Julius Baer, under new CEO Stefan Bollinger, will revamp its risk and compliance management functions.
This includes «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». Former risk chief Oliver Bartholet was also replaced by Ivan Ivanic, who was shifted from his role as chief credit officer.
«Significant progress [has been made] in addressing legacy issues and other pressure points, ranging from strengthening risk management and simplifying the organization, to sharpening the operating model and footprint,» the bank noted in its latest results.
Return to Roots
According to chairman and ex-HSBC CEO Noel Quinn, much of the bank’s recent troubles stem from a «strategic drift» away from its core wealth management business to riskier lending to clients invested in fixed assets, which are «more aligned to corporate banking».
«The financial performance has been inconsistent and volatile and not what you would expect from a pure-play wealth manager,» said Quinn during a strategy update presentation last month. «[We will] revert to a strategic perimeter for Julius Baer that aligns with a wealth manager, not a corporate bank.»
