Julius Baer Initiates Cost-Cutting Measures
Swiss Bank Julius Baer is intensifying its efforts to save costs, aiming to reach SFR130 million (approximately $159 million) by 2028. This was announced in a strategy update on Tuesday.
The Zurich-based bank, which also acts as a wealth manager, previously set a goal to cut SFR110 million by the end of this year, which was revealed in February.
The bank stated that these new cost-reduction goals will be pursued by streamlining non-personnel expenses, enforcing cost discipline, and simplifying operations. This initiative comes as banks grapple with longstanding issues, including significant loan losses and regulatory fines.
Recently, there were reports about the bank’s loss of a SFR130 million loan, and the Financial Times disclosed that it has been mandated by the nation’s financial regulator to pay SFR4 million or more due to money laundering and non-compliance related to high-risk clients. This decision had not been previously reported by either the bank or the regulator.
Last year, Julius Baer fully wrote off its SFR606 million exposure to the Austrian real estate group Signa, leading to the closure of its private debt business and a leadership shake-up. Stephen Bollinger assumed the CEO role in January.
The bank emphasized its commitment to enhance risk management and compliance processes throughout the organization in the latest strategy update.
Since Bollinger’s appointment, there has been a robust push toward cutting costs, streamlining operations, and revamping the executive committee. Former HSBC leader Noel Quinn joined as chair last month.
On Tuesday, Julius Baer indicated that by the end of 2025, it expects to surpass the previously outlined cost cuts of SFR110 million.
The goal is to achieve a cost-to-revenue ratio of less than 67% by 2028, with aspirations of reaching a 4-5% growth for net new money up to that timeline, against a prior target of 64% by 2025.
Thomas Hallett, an analyst at Keefe, Bruyette & Woods, described the strategy update as “overwhelming” and noted that the targets for net new money and cost-income ratio were underwhelming.
Bollinger stated, “Since January, we’ve made substantial progress in various areas aimed at reinforcing the trust of our organization and its stakeholders.”
