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Julius Baer Announces CEO Change and Signa Loan Write-Offs

  • By The Swiss Times
  • 1 February 2024

Julius Baer embarks on leadership and strategic shift post-Signa losses, with CEO Philipp Rickenbacher stepping down and significant loan write-offs announced.

Julius Baer Announces CEO Change and Signa Loan Write-Offs
©Keystone/SDA – ENNIO LEANZA

Julius Baer moves to rectify its course following the Signa incident. Reports on Wednesday evening confirmed CEO Philipp Rickenbacher’s resignation. The bank is also erasing its full loan exposure to Signa Group.

The bank made Rickenbacher’s exit public on Thursday morning, alongside its 2023 fiscal results. Philipp Rickenbacher leaves his role as Group CEO immediately. Nic Dreckmann, his deputy and ex-COO, steps in temporarily, as stated in the announcement. Rickenbacher has been at Julius Baer’s helm since 2019. He made 9.6 Million CHF last year.

Group Profit Takes a Hit

Concurrently, Julius Baer is nullifying all its private debt loans to Signa Group, owned by Austrian investor René Benko, now insolvent. This results in CHF 606 million in net credit losses. The bank plans to withdraw from such loan financing, focusing on Lombard and mortgage loans instead.

This decision to write off loans significantly impacts the bank’s profits, reducing them by half in 2023: down 52% from last year to CHF 454 million. Excluding integration and restructuring expenses, profits dropped 55% to CHF 472 million.

Julius Baer disclosed in November that it had issued loans totaling CHF 606 million to a “European conglomerate”, later revealed to be Benko’s Signa.

Executive Compensation Adjustments

Despite profit downturns, shareholder dividends remain constant at CHF 2.60 per share. However, executive remuneration faces cuts: no bonuses for the CEO and Executive Board’s top five, and reduced pay for the Board of Directors.

The shake-up extends beyond Rickenbacher; Board member David Nicol, the Risk Committee’s chief, also departs. Romeo Lacher, Board Chairman linked to the Signa dealings, retains his position.

Stable Asset and Advisor Growth

Year-end assets under management stood at CHF 427 billion, a slight year-over-year increase. The bank also bolstered its advisory team, adding 95 client advisors.

Despite recent setbacks, Julius Baer saw CHF 12.5 billion in new money inflows in 2023, a 2.9% growth. European clients, including those from Switzerland, largely contributed to this increase. However, this figure fell short of the 3 percent growth reported in October.

The bank’s latest financials fell below market predictions, especially regarding the total write-off of Signa loans, surprising many analysts. The dividend forecast, however, met expectations.

©Keystone/SDA

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