Swiss private bank Julius Bär cuts 400 jobs despite profit boost

Julius Baer increases profit and cuts 400 jobs Keystone-SDA

Swiss private bank Julius Baer Group will shed 400 jobs despite seeing profits rise significantly last year.

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The bank’s profits climbed by 125% to CHF1.02 billion in the 2024 financial year. This follows a poor 2023 when Julius Bär reported a halving of profit due to write-downs of CHF606 million on loans to the insolvent Signa Group of Austrian investor René Benko.

The private bank says it is is expanding its ongoing cost-cutting programme, which will affect around 400 jobs.

Faster inflow of new money

The private bank’s assets under management (AuM) amounted to CHF497 billion at the end of 2024. This was a significant 16% higher than the figure at the end of 2023.

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New money inflows of CHF14.2 billion contributed to the increase, compared to CHF12.5 billion in new client assets in the previous year. Inflows to the private bank accelerated significantly in the second half of the year in particular. In addition, there was a positive performance on the equity markets and a positive currency effect.

Julius Bär shareholders are to receive an unchanged dividend of CHF2.60 per share for the past financial year. This means that the distribution will remain at this level for the fourth year in succession. Contrary to the expectations of market participants, there will be no share buyback.

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Further cost savings

CEO Stefan Bollinger, who has been in office since 9 January, is already showing the first signs by extending the current cost-cutting program. After the cost initiatives had already led to annual savings of CHF140 million by the end of 2024, further gross savings of CHF110 million are to be achieved in the current year.

The savings will be realised in personnel costs as well as in general costs, COO Nic Dreckmann said in a conference call. The cost program is expected to cost around 5% of the workforce, or around 400 people. The job cuts, which are aimed not least at a leaner “mid and back office”, are likely to mainly affect Switzerland. The program will also lead to one-off costs of around CHF55 million in the current year.

Smaller management team

At the same time, the Executive Board will be reduced from 15 to five members with immediate effect. In addition to CEO Stefan Bollinger, it comprises COO Nic Dreckmann, Chief Risk Officer Oliver Bartholet, Chief Financial Officer Evie Kostakis and Chief Legal Officer Christoph Hiestand. CEO Bollinger is convinced that the leaner management team will increase accountability and improve customer focus.

Julius Bär intends to present a strategy update, including new medium-term targets, “before summer 2025”. It is also still unclear who will take over as Chair of the Board of Directors from April. At the end of January, incumbent Romeo Lacher announced that he would not be standing for re-election at the Annual General Meeting in April.

The annual results were greeted with massive losses on the stock market on Monday: Julius Bär shares were down 7.9% shortly after the opening. Although the annual profit exceeded analysts’ expectations, they were disappointed by the lack of a share buyback programme.

Translated from French with DeepL/mga

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