Moody’s downgrades Julius Baer’s long-term rating to A3
Published: Wednesday, Dec 20th 2023, 22:10
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The rating agency Moody's has lowered its long-term issuer rating for Bank Julius Baer to A3 from A2 following the disclosure of large loans by the Zurich-based private bank to the troubled Signa Group.
Moody's lowered the outlook to negative from previously stable. Moody's also lowered the rating for Julius Baer's senior unsecured debt and deposits to A1 from Aa3, the agency announced on Wednesday evening. The long-term ratings for the parent company Julius Baer Group remain at Baa1, but the outlook has also been lowered to negative.
The rating agency justifies the downgrades with the higher than expected risk appetite and the risk concentration in the credit book of the Zurich-based asset management bank.
At the end of November, Julius Baer announced that it had lent CHF 606 million to a "European conglomerate". According to insiders, this debtor is the troubled Signa Group owned by Austrian investor René Benko.
The case is in line with various problems from the past, Moody's added. In 2020, for example, the Financial Market Supervisory Authority Finma identified deficits in corporate governance with regard to the detection and prevention of money laundering, the agency recalled.
The experts at Moody's are of the opinion that these problems have now been resolved. However, the latest value adjustments point to new, previously unforeseen risks, they say.
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