Julius Baer has lent Signa more than CHF 600 million
Published: Monday, Nov 27th 2023, 11:21
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Austrian real estate entrepreneur René Benko and his faltering Signa holding company are in debt to Julius Baer to the tune of CHF 606 million. The private bank does not rule out further write-downs on these loans.
It is the largest single position within the private debt loan book totaling CHF 1.5 billion, Julius Baer announced on Monday, without naming Benko. The fact that it is the Austrian was confirmed to AWP by well-informed sources.
Such structured loans are only granted to very wealthy private clients. All in all, the bank has outstanding loans totaling 41 billion.
Measures taken
Julius Baer had already written off CHF 70 million on outstanding loans a few weeks ago. The amount was "primarily" attributable to the loans to Benko, the bank confirmed on Monday.
The shaky exposure to Benko is secured by "several packages of collateral related to commercial real estate and luxury retail", Julius Baer emphasized. And the bank had taken measures to preserve the value of the collateral provided.
Nevertheless, Julius Baer does not rule out further write-downs. If these are necessary, they will be booked appropriately. The most important question, according to analysts, is therefore what collateral Julius Baer holds from Signa and how much it is still worth.
Julius Baer CEO Philipp Rickenbacher, meanwhile, is being clear in the press release: the bank will review its private debt business and the framework within which it is operated.
Signa urgently needs money
The turbulence surrounding the Signa empire has been making waves for several weeks now. The group is urgently looking for new investors - according to the Handelsblatt, loans worth 1.5 billion euros are due by mid-2024.
As "Der Spiegel" recently reported, the first company in the highly convoluted real estate empire has already filed for bankruptcy.
And for a month now, the construction site at the Signa prestige project Elbtower in Hamburg has been at a standstill due to unpaid invoices. It is the Austrians' largest construction site. According to a media report, billionaire and logistics entrepreneur Klaus-Michael Kühne is now considering taking over the high-rise project in his native city.
The Swiss department store chain Globus would also be affected by a possible collapse of the Benko empire. Half of it - together with its real estate - is owned by Signa. The other half belongs to the Central Group from Thailand, or rather the heavily wealthy Chirathivat family.
Stock market anticipates further write-downs
On the stock market, Julius Baer's attempt to calm the waters somewhat with the disclosure of the Signa loans did not really work. At around 10.30 a.m., the value of Baer shares fell by a further 1.4 percent. The share was thus down around 15 percent in 2023.
Analysts expect that Julius Baer will have to make further write-downs on its Signa loans. Anke Reingen from Canada's RBC, for example, has already included a further CHF 100 million in her estimates.
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