Home » Business » Julius Baer’s 606 million Swiss francs loan loss to René Benko’s corporate empire

Julius Baer’s 606 million Swiss francs loan loss to René Benko’s corporate empire

Julius Baer, ​​the largest Swiss private bank, granted René Benko’s corporate empire loans worth 606 million Swiss francs. Since it accepted bad collateral, it will lose most of it.

Heads are spinning in the executive suite of Switzerland’s largest private bank, Julius Baer. Because the bank has a problem: three loans were granted to René Benko’s SIGNA conglomerate. The majority of the total 606 million Swiss francs will have to be written off. That means – they are gone.

Secured “adventurously”.

As the “Tagesanzeiger” reports, the loans were extremely poorly secured. According to the Swiss newspaper, shares in the same company would have been used for a first loan of 200 million francs to “Signa European Invest Holding” at the end of 2022. These are now worth almost nothing. The “Tagesanzeiger” therefore describes the collateralization as “adventurous”. Another source brings hoped-for income from the luxury trade in department stores such as KaDeWe, which also belongs to the SIGNA Group, into play as agreed collateral. But the bank could hardly rely on that either. According to the German business magazine “Capital”, the KaDeWe Group is currently preparing to file for insolvency.

For another 200 million franc loan, Julius Baer accepted a second-tier mortgage on the Oberpollinger department store in Munich. The problem: The department store, half of which belongs to the SIGNA Group and the other half to Benko’s Thai business partner Central Group, is also insolvent. The German financial group Signal Iduna had the first-lien mortgage registered for the property. This means that Julius Baer’s money seems almost certainly lost.

According to “Tagesanzeiger”, the private bank repeated the mistake from the first loan with the third loan for more than 200 million francs and had the loan secured with shares from a SIGNA Prime subsidiary. These are now probably classified as junk.

Astonishment in financial reporting

It is not only the “Tagesanzeiger” that is surprised that Julius Baer’s managers acted so carelessly. He finds it “inexplicable that the Julius Baer management granted René Benko such huge loans – and did not require any collateral worthy of the name.”

The well-informed Swiss financial portal “InsideParadeplatz” writes about the once prestigious Bär private bank: “Either way, the fiasco is total. The supposed pure-play bank has turned out to be a high-risk casino player.”

René Benko was apparently able to dazzle Julius Baer’s executive suite with his opaque corporate jungle and the upgrading of top properties. A Julius Baer image campaign says: “How you invest today is how you live tomorrow.” That remains to be seen. On Thursday, the management team wants to reveal how much they actually lost to Benko’s SIGNA Group.

Whether this will answer the question of the origin of the funds is still an open question. Insiders believe it is possible that the “Bär” bank has invested third-party funds from a non-EU country in the SIGNA network.

Cover photo: Screenshot of the Juliusbär image campaign, GEORG HOCHMUTH / APA / picturedesk.com, Montage ZackZack

2024-01-29 21:55:28
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