Julius Baer will look to turn the page on the Signa debacle as the Swiss financial watchdog concludes its proceedings, with the requirement of additional capital buffers and confiscation of profits.
The Swiss Financial Market Supervisory Authority (FINMA) has concluded its enforcement proceedings against Julius Baer over private debt loans linked to Signa, a now-bankrupt real estate group owned by Austrian René Benko, alongside client relationships involving two Russians deemed as politically exposed persons (PEP).
FINMA’s probe followed Julius Baer’s 2024 loan write-off of around CHF 600 million (USD 720 million).
According to a statement, the regulator is lifting or relaxing measures restricting activities in the lending business and in relation to entering into new business relationships with PEPs from high-risk countries. However, the Swiss watchdog is now imposing new measures, including the requirement to submit reports up until 2032 to provide an account of its risk, error and compliance culture; additional capital buffers of CHF 250 million; and the confiscation of around CHF 10 million in profits related to violations.
FINMA has also launched proceedings against three former Julius Baer employees who may be responsible for “violations of supervisory provisions or internal guidelines”, though no names were disclosed.
“Today we’ve reached an important milestone, which is a recognition of our efforts over the past 20 months. The renewed management team, in alignment with FINMA, initiated and implemented a series of measures to swiftly address long-standing legacy matters. We would like to thank FINMA for the open and constructive dialogue and our employees for their dedication, commitment, and professionalism,” said Julius Baer CEO Stefan Bollinger in a separate statement.
“These significant changes have made Julius Baer the simpler and stronger organisation it is today, with a solid foundation and a clear strategic direction. We are fully focused on the future and look forward to delivering sustainable, high-quality growth and long-term value for our clients, shareholders, and all other stakeholders.”
