Julius Bär ordered to repay CHF153 million missing German funds
Julius Bär has been hit with two large write-downs in a matter of weeks.
Keystone / Alessandro Della Bella
Swiss bank Julius Bär has been ordered to pay CHF153 million ($155 million) to settle a claim that one of its subsidiaries pilfered money from Germany during the reunification of the country in the 1990s.
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A Swiss court on Wednesday overturned a previous verdict that Julius Bär should not he held responsible. The Swiss wealth manager has been pursued for damages by a German state department that tracks down assets from the former East Germany.
Julius Bär has always maintained that it was not to blame, having acquired a German bank in 2005 that carried out the irregularities between 1990 and 1992. In 2016, a Zurich court agreed with Julius Bär’s argument, a decision that was confirmed by another court last year. But an appeal has now sided with the German state complainant.
As a result, Julius Bär has written down CHF153 millionExternal link (comprising CHF97 million plus accrued interest since 2009) from this year’s profits. The bank says it will appeal the decision to the Supreme Court.
“Julius Baer has always contested and continues contesting the claims,” it stated, adding that it would seek reimbursement from UBS, from whom it bought the German bank Cantrade in 2005.
In a separate case last month, Julius Bär also had to write down CHF99 million of losses incurred by its Italian-based asset management unit Kairos.
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Julius Bär takes CHF99 million hit on ailing Italian unit
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Julius Bär issued the warning on Tuesday, less than three months into the tenure of new CEO Philipp Rickenbacher. Although assets under management have grown 10% so far this year (CHF422 billion), net new money has weighed in with a disappointing 3% growth. “It is therefore unlikely that the group will achieve its medium-term target…
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A German state department responsible for investigating irregularities over the 1990 reunification had demanded the return of CHF97 million plus CHF107 million in interest payments – a total of CHF204 million ($202 million) – from the Swiss private bank. An East German trading company is alleged to have withdrawn the money between 1990 and 1992…
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