Julius Baer’s chief govt and the chair of the governance and threat committee are each stepping down after the Swiss financial institution noticed its full-year income virtually halve on account of publicity to distressed Austrian property group Signa.
The financial institution has taken a CHF 586m (€628m) hit from loans to the property developer, which has stakes in KaDeWe, Germany’s most well-known division story, and the Chrysler Constructing in New York.
Julius Baer has introduced that it’s now exiting from its personal debt enterprise solely and is winding down its remaining personal debt e-book of CHF 0.8bn.
It is going to be refocusing its credit score enterprise on “areas of historic energy” for the corporate, which it mentioned are Lombard loans – which use liquid belongings as collateral – and mortgage lending.
Learn extra: CMBS to rise as industrial property lending stalls
The financial institution reported a 55 per cent year-on-year drop in adjusted web revenue of CHF 472m in its 2023 outcomes.
It mentioned this mirrored web credit score losses of CHF 606m, which incorporates the CHF 586m loss from its publicity to Signa.
Julius Baer mentioned that chief govt Philipp Rickenbacker is stepping down, with Nic Dreckmann, deputy chief govt and chief working officer, to change into interim chief govt.
Learn extra: Signa collapse set to affect European industrial property sector
David Nicol, chair of the governance and threat committee of the board of administrators, won’t stand for re-election on the 2024 annual shareholder assembly.
“Talking on behalf of all the board of administrators, I deeply remorse that the total loss allowance for the biggest publicity in our personal debt enterprise has considerably impacted our web revenue for 2023,”mentioned Romeo Lacher, chairman of Julius Baer Group
“Our 2023 outcomes replicate our dedication to finish any uncertainty relating to our personal debt enterprise via this full loss allowance. The outcomes additionally replicate the continued monetary energy of Julius Baer, as expressed by our capitalisation, the solidity of our steadiness sheet, and our strong underlying profitability. We’re refocusing our lending exercise on extra conventional areas, that are an vital a part of our wealth administration providing.”
Julius Baer is without doubt one of the largest lenders to Signa. It mentioned final November that it was reviewing its personal debt enterprise amid ongoing losses referring to its publicity to the developer.
Signa fell into bother final yr amid wider challenges within the industrial property market. It declared insolvency on the finish of November with round €5bn of money owed, after eleventh-hour makes an attempt to safe new funding failed.
