Julius Baer books S$242.2 million loss provision on property loans

[ZURICH] Julius Baer said it is booking a 150 million Swiss franc (S$241.9 million) loan-loss provision, as it continues to wind down lending not in line with its core wealth-management strategy.

Wealthy clients have added a net 11.7 billion Swiss francs in the 10 months through October, the Zurich-based bank said in its interim statement released on Monday (Nov 24).

Assets under management grew 4 per cent in the first 10 months to 520 billion Swiss francs.

Chief executive officer Stefan Bollinger and chairman Noel Quinn are seeking to refocus the bank, after losses linked to the collapse of Rene Benko’s real estate empire prompted the wealth manager to shake up its top management.

They are asking for patience from investors as a buyback plan remains on hold, until the completion of a review into the Benko affair by the Swiss regulator Finma.

Julius Baer completed a credit review announced in May and has decided to “manage down a subset of loan book positions”, primarily in residential and commercial real estate, amounting to 700 million francs. 

The bank announced that Victoria McLean, from Goldman Sachs, is joining the bank to take on the newly established chief compliance officer role, and also become a member of the executive board. 

After writing off US$700 million in loans when Benko’s conglomerate unraveled in late 2023, Baer shut down its private-debt business and has been winding down its private-debt loan book.

The stock has been one of the worst performing among the European banks this year.

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As part of his turnaround plan, the new CEO has slashed the top management ranks and announced hundreds of job cuts. He has cautioned that his restructuring efforts will push up expenses at first, before bearing fruit from 2026. BLOOMBERG