Julius Baer Group’s new CEO Stefan Bollinger announced a radical revamp of the bank’s governance in his first moves in charge, and signalled that job cuts are on the way.
The Swiss wealth manager’s executive board is being cut to five members from 15, and the bank will seek an additional 110 million Swiss francs ($163.92 million) in annual cost savings, it said in a statement Monday.
Annual profit for 2024 increased to 1.02 billion Swiss francs, more than double the 2023 amount which was impacted by losses linked to the Signa real estate bankruptcy. Assets under management grew 16% to 497 billion francs, according to the statement.
In charge for less than a month, Bollinger’s first step enacts a focus on costs that he announced as soon as he arrived. While the bank didn’t provide details, it said that savings would come through the governance changes, reducing back and mid-office functions and by pushing down spending on external consultants.
Last week, Bloomberg reported Julius Baer had discussed reducing the workforce by 10% or less. The bank had about 7,400 employees at the end of 2023.
“A new leadership structure and a leaner executive board will increase accountability,” Bollinger said in a statement.
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Julius Baer is aiming at completing a turnaround launched in the aftermath of losses linked to the defunct Rene Benko’s collapsed real estate empire. The results of an investigation by regulator Finma into related risk control losses are expected to be announced soon, potentially giving Julius Baer the opportunity to detail its plans to return capital to shareholders, Bloomberg reported last week.
The bank said it would present a strategy update, including new medium-term targets, ahead of the summer.
The focus on cutting costs matches concerns raised by analysts in recent quarters. Baer’s cost-to-income ratio has deteriorated steadily since 2021, as expenses grew faster than revenue.
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In his first town-hall meeting on Jan. 9, Bollinger addressed the cost issue head on, saying that there had been a lot of hiring without corresponding revenue growth.
The new executive board will consist of the CEO and deputy CEO Nic Dreckmann, chief risk officer Oliver Bartholet, chief financial officer Evie Kostakis, and group general counsel Christoph Hiestand.
