– Julius Baer CEO resigns
New beginning at Julius Baer: CEO Philipp Rickenbacher has to step down because of the Signa debacle. The bank is writing off the Signa loans completely, getting out of the private debt business and radically cutting the bonuses of top managers. Is that enough?
Published: January 31, 2024, 7:42 p.m. Updated 1 hour ago
Departure: CEO Rickenbacher leaves his position.
Bild: Keystone/Ennio Leanza
First assessment by Notker Blechner at 8:05 a.m
For a long time it seemed that Julius Baer’s expensive commitment to the now insolvent Signa Group would have no personnel consequences. Now the secretive private bank has pulled the ripcord. On Thursday morning it announced the departure of CEO Rickenbacher.
In addition, further measures were announced to regain the shattered trust of investors. The bank is giving up the private debt business with a volume of CHF 0.8 billion – 2% of the entire loan book. In addition, the bonuses for CEO Rickenbacher and other top managers will be canceled.
The balance sheet was cleared. After a first small part of the Signa credit exposure of CHF 606 million was written off in November, the entire remainder was now written off. As a result, profits collapse by over 50% to just CHF 454 million. This is more than expected.
The only consolation for shareholders: the proposed dividend remains unchanged at CHF 2.60 per share.
The announced clean-up campaign at Bär is likely to calm the market for the time being. Investors had criticized the weeks of stalling tactics. The shares may have finally found their bottom now that the bad news is out and organizational and personnel consequences have also been decided. But it still remains to be seen whether customers will also accept the signal for a new departure at Bär and bring their money back to the private bank. The net inflow of new money of CHF 12.5 billion in 2023 gives hope.
Read the detailed analysis at around 4 p.m.
(AWP) Bank Julius Baer wants to come clean after the Signa debacle. As various media reported on Wednesday evening, CEO Philipp Rickenbacher is resigning. The private bank also writes off the entire loan commitment to the Signa Group.
Now the resignation is official: Julius Baer announced the departure of their CEO on Thursday morning together with the publication of their 2023 business figures. Philipp Rickenbacher is stepping down as head of the group with immediate effect. He will be succeeded on an interim basis by his deputy and former Chief Operating Officer (COO) Nic Dreckmann, according to the statement. Rickenbacher has led Julius Baer since 2019.
Group profits halved
At the same time, Bär is completely writing off the entire “private debt” loans to the insolvent Signa Group of the Austrian investor René Benko. This leads to net credit losses of CHF 606 million. Julius Baer now wants to exit the business with such loan financing and focus on Lombard and mortgage loans.
Because of the high depreciation, the consolidated profit for 2023 will be halved: at CHF 454 million, it will be 52% below the previous year’s result. Group profit adjusted for integration and restructuring costs fell by 55% to CHF 472 million.
Julius Baer had already announced at the end of November that the bank had granted loans worth CHF 606 million to a “European conglomerate”. This was obviously the Signa real estate and department store group owned by the Austrian real estate investor René Benko, where not only the holding company but also more and more subsidiaries are in insolvency proceedings.
Bonuses canceled
Despite the decline in profits, the distribution to shareholders should remain stable: the board of directors is proposing an unchanged dividend of 2.60 francs per share. However, there is significantly less money for the management: the CEO and five members of the management board will not receive any bonus at all and the chairman of the board of directors and other board members will not receive certain salary components.
In addition to CEO Rickenbacher, board member David Nicol also has to vacate his post. The Brit was head of the risk committee on the board of directors. However, Chairman of the Board of Directors Romeo Lacher, who came under criticism in connection with the Signa commitment, remains in office.
Further inflows of new money
Assets under management amounted to CHF 427 billion at the end of the year, compared to CHF 435 billion at the end of October 2023. This means that they have increased by 1% within the year. Julius Baer also hired new advisors last year: a total of 95 new customer advisors were hired.
Despite the negative headlines in recent weeks, the bank was able to record an inflow of new money of CHF 12.5 billion in 2023, which corresponds to new money growth of 2.9%. In the previous year there were inflows of 9 billion. It was said on Thursday that customers from Europe, including Switzerland, had entrusted Julius Baer with their assets. At the end of October, however, Julius Baer reported annualized new money growth of 3%.
With the figures presented, Julius Baer remains well below market expectations. The range of estimates was high due to the uncertainty surrounding the provisions. However, hardly any analyst expected a complete write-off of the Signa loans. The dividend, however, was expected to remain unchanged.
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2024-02-01 01:51:53
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