Julius Baer: Painful Déjà-Vu After Signa
The Swiss private bank Julius Baer was among the main lenders to the now-insolvent German property group Degag, which explains a large portion of the additional write-downs the bank announced earlier this year.
In July, Julius Baer reported its half-year results – showing a 35 percent decline in profit compared to the first half of 2024, down to 295 million francs. The drop was mainly due to significant credit impairments of 130 million francs, compared to just 7 million francs in the previous year, alongside the sale of the bank’s Brazilian unit.
As early as May, the Zurich-based institution had already warned of further bad loans in a statement covering the first four months of 2025, leading to internal personnel changes, as reported by finews.asia. At the time, however, the bank – traditionally focused on wealth management – did not specify which exposures had been hit by write-downs.
Main Lender to Degag
In its report, the bank noted that it had applied «stricter criteria regarding credit quality and the adequacy (or extent) of wealth management relationships». As a result, it increased provisions on «selected positions within its mortgage portfolio and the remaining private-debt book».
Now, according to new information from Germany’s «Handelsblatt», the picture has become clearer. The newspaper’s investigation revealed that Julius Baer – including its German subsidiary – was the main banking creditor of Degag. According to a preliminary but unpublished report by the insolvency administrator, the Swiss parent and its German arm have filed claims of 48 million euros.
In total, Julius Baer is said to have granted credit lines exceeding 100 million euros to various companies within the Degag group, the «Handelsblatt» reports.
Deeply Overleveraged Developer
The Degag property group collapsed in 2024 under heavy debt, which the insolvency administrator estimates at up to 1.1 billion euros. The company’s business model relied on buying residential blocks, renovating them, and reselling them – financed by both investors and bank loans.
When asked by finews.asia, Julius Baer confirmed that it had extended «mortgage loans in the high double-digit million-franc range to a private corporate group for the financing of residential properties in Germany» and that «some borrowers within this group have since encountered financial difficulties».
Another Blow
Julius Baer had already suffered heavy losses from the 2023 collapse of Austrian property conglomerate Signa, owned by René Benko. That episode forced the Swiss bank to write off 586 million francs in total – and the Degag exposure now adds another blow to its balance sheet.
