Julius Baer Issues Profit Warning
Swiss private bank Julius Baer has crossed the half-trillion mark in assets and strengthened its capital ratios, yet the bank’s latest update shows that cleaning up past lending missteps continues to weigh on profitability and investor confidence.
Zurich-based Julius Baer reported a record 520 billion francs in assets under management (AUM) by the end of October, powered by 11.7 billion francs in net new money (NNM) and buoyant equity markets.
The bank emphasized that rising markets and stable gross margins helped drive meaningful revenue growth and stronger operating leverage.
Final Sweep of Credit Issues – at a Cost
The bank announced the completion of its long-running credit review, calling it a decisive step in resolving «legacy credit issues». A subset of loans, primarily income-producing residential and commercial real estate positions totalling 0.7 billion francs, will be managed down as they no longer align with the refocused risk appetite.
To reflect forward-looking risks, Julius Baer will book additional loan loss allowances of 149 million francs in November. The move follows last year’s private-debt unwind and marks the final clean-up phase of a costly chapter.
Stronger Capital, Tighter Cost Discipline
Despite Basel III reforms that reduced capital ratios earlier this year, Julius Baer’s CET1 ratio improved to 16.3 percent, remaining comfortably above its internal floor of 11 percent.
The adjusted cost/income ratio for the first ten months fell to 66 percent from 71 percent in full-year 2024, with the bank now expecting to exceed its 110 million francs cost-savings target by 20 million francs.
The operating leverage improvement signals progress on efficiency – but also reflects an organisation still rebuilding credibility after last year’s credit fallout.
Where Growth Is Coming From
Net new money continued to flow from Asia, particularly Hong Kong, India, Singapore, and Thailand, as well as Western Europe and the Middle East. Julius Baer noted that client activity moderated during the summer months before rebounding in September and October, while recurring fees and treasury-swap income remained stable contributors to the gross margin.
The strong inflows underscore the continued relevance of the bank’s international franchise despite a year of heavy de-risking.
Compliance Overhaul
To complete the reorganisation of its risk and compliance function, the bank appointed Victoria McLean, a seasoned Goldman Sachs executive with over 30 years of cross-border wealth-management experience, as chief compliance officer, joining the executive board in February 2026.
Her arrival completes the formation of Julius Baer’s revamped risk organisation, which is central to the bank’s «stronger, simpler» narrative.
Expanding in Switzerland and Beyond
Julius Baer is reinforcing its home-market leadership with new Switzerland co-heads starting in January 2026, while accelerating its footprint in high-growth international markets.
New offices are planned in Abu Dhabi and Lisbon, building on this year’s expansion in Milan. The bank portrays this as a dual-track strategy: defend domestic leadership while deepening presence in global wealth hubs.
Profit Will Fall This Year
Julius Baer warned that IFRS net profit for 2025 will come in below 2024 due to non-recurring items, including the sale of its Brazil operations and the year’s credit-loss charges.
Stripping out those effects, the bank argues that its underlying profitability, capital generation, and franchise momentum remain robust, a message directed squarely at investors still assessing how much the cleanup will ultimately cost.
