Julius Baer to take US$460 million Benko write-down

JULIUS Baer Group will write off some US$463 million or more related to its exposure to bankrupt property mogul Rene Benko’s Signa empire, Sonntagszeitung reported.

The write-off is scheduled to be announced on Thursday (Feb 1), when the bank reports its full-year 2023 earnings, the Swiss paper said, citing an unidentified person within the lender.

Baer extended loans to the Signa real estate empire of about US$700 million, and has been investigated by Switzerland’s financial watchdog over inadequate risk-control structures. The Zurich-based lender has signalled that it’s reviewing the private-credit business at the heart of the Benko exposure. 

A spokesman for Julius Baer declined to comment on the report.

The US$463 million write-down would be roughly in line with analyst expectations.

In December, analysts at Zurcher Kantonalbank estimated that amount following a meeting with Baer chief financial officer Evie Kostakis. Analyst Michael Klien raised his expectations for loan losses on the basis that the private-credit business often doesn’t involve recourse to real assets. BLOOMBERG