By Ariane Luthi
ZURICH (Reuters) -Swiss bank Julius Baer plans to cut its workforce by about 5% under new chief executive Stefan Bollinger and is reducing the size of its executive board as it reorganises after heavy losses from exposure to failed property group Signa.
The wealth manager targets savings of 110 million Swiss francs ($120.1 million) and is shrinking the executive board to five members from 15 with immediate effect, it said after reporting a worse than expected 2024 pretax profit on Monday.
The results sent its shares down more than 10% to their lowest level since November.
Bollinger, who took the helm last month after his predecessor was ousted in the wake of the Signa losses, said a new leadership structure and smaller executive board would increase accountability, instilling discipline from the top down.
“This is the first move to create a leaner, more straightforward way of running our business. We are going to apply the same principles through the entire organisation,” said Bollinger.
The planned cuts amount to 400 jobs, said operations chief Nic Dreckmann, and would focus on back office and other non-client facing positions, predominantly in Switzerland.
Baer’s cost-income ratio stood at 70.9% in 2024, which the bank said was “still unsatisfactory” and far removed from its 2025 target of less than 64%. The bank also said it had decided not to launch a new share buyback programme.
Though assets under management were up 16% at 497 billion francs, analysts at Bank Vontobel described the results as mixed, flagging adjusted pretax profit 3% below consensus expectations.
The pace of net new money inflows would likely flatten, the bank said in an analysts’ call.
“We currently think the net new money pace in 2025 will probably be closer to the 3% we did in 2024, rather than the 4-plus percent we saw in H2,” finance chief Evie Kostakis said.
Baer had strengthened its risk framework, leading to “a slightly more conservative risk profile when it comes to clients,” Kostakis said.
Julius Baer is still subject to an enforcement assessment by Swiss financial market authority FINMA following the Signa losses, which ushered in major changes in the management.
Last month Chairman Romeo Lacher said he would step down in April, clearing the way for a fresh start at the top.
The bank would not announce share buybacks before completion of the review and was currently not envisaging any M&A activities but was focused on organic growth, CEO Bollinger said.
($1 = 0.9159 Swiss francs)
(Reporting by Ariane LuthiEditing by Dave Graham, David Goodman and Susan Fenton)
