Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Julius Baer has been hit with another large loan loss, worth SFr130mn ($157mn), and said its chief risk officer was “retiring” from the Swiss bank, dealing a fresh blow to the company’s turnaround efforts.
The Zurich-based lender and wealth manager disclosed on Tuesday that it had taken a loan loss charge related to its private debt business and “selected positions” in its mortgage book, which follows a SFr606mn writedown last year that triggered a leadership overhaul.
It added that Oliver Bartholet, who has served as the group’s chief risk officer since 2018, would “hand over his responsibilities” on July 1 and “retire” from the business at the end of the year.
It comes after the Financial Times revealed last week that Julius Baer had been ordered to pay more than SFr4mn by Switzerland’s financial regulator over anti-money laundering and compliance failings in its handling of high-risk clients.
The enforcement decision had not previously been made public by either the private bank or the Swiss Financial Market Supervisory Authority’s (Finma).
The SFr130mn charge marks the latest blow to scandal-hit Julius Baer, which is trying to execute a turnaround plan under its new leadership. Last year, the bank wrote down its full SFr606mn exposure to now-collapsed Austrian property group Signa and shut its private debt business.
The bank said it booked the latest charge after its new leadership undertook “an extended review of the remainder of the credit portfolio”.
It added: “After applying more prudent criteria with respect to credit quality . . . the loan loss allowances for selected positions in the mortgage book as well as the remaining private debt loan book were increased.”
Meanwhile, Bartholet’s departure is the latest executive leadership change at Julius Baer since former Goldman Sachs banker Stefan Bollinger took over as chief executive in January.
Bollinger has embarked on an aggressive cost-cutting drive, axing jobs, slimming down the executive board and refining the bank’s strategy. Former HSBC boss Noel Quinn also joined as chair earlier this month.
The bank said that Ivan Ivanic, its chief credit officer, who only joined from UBS in February, would replace Bartholet.
“As we are swiftly addressing legacy issues, we are also paving the way forward to unleash the full potential of our unique franchise and delivering on our stakeholders’ expectations,” Bollinger said in a statement.
The bank reported net new money inflows of SFr4.2bn during the first four months of the year “despite ongoing de-risking of the client book”.
https://www.ft.com/content/f9ac293e-5723-4e32-8292-6b2e2d9dc607
