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Julius Baer set out plans to cut another SFr130mn ($159mn) in costs as part of a strategic update aimed at restoring confidence in the Swiss bank after a string of scandals.
The Zurich-based lender and wealth manager on Tuesday laid out the new target for 2028, as it seeks to engineer a turnaround under new management. It had already set a separate target of SFr 110mn of cuts to be achieved by the end of this year.
Julius Baer said the new cost target would be achieved by “streamlining non-personnel expenses”, as well as focusing on “cost discipline” and IT simplifications.
However, the bank also said it was aiming for a cost-to-income ratio of less than 67 per cent by 2028, which is weaker than a previous target of 64 per cent by 2025.
The strategy update comes as Julius Baer struggles to overcome legacy issues that have included large loan losses and regulatory penalties.
Last month it reported a SFr130mn loan loss, while the Financial Times recently revealed it had been ordered by the country’s financial regulator to pay more than SFr4mn for anti-money laundering and compliance failings in its handling of high-risk clients.
The enforcement decision had not previously been disclosed by either the bank or the regulator.
Last year the bank wrote down its full SFr606mn exposure to now-collapsed Austrian property group Signa and shut its private debt business, triggering the leadership overhaul. New chief executive Stefan Bollinger took over in January.
“Julius Baer is committed to upgrading its risk and compliance management processes and accountability throughout the organisation,” the bank said in its strategy update.
Since he joined, Bollinger has overseen an aggressive cost-cutting drive, axing jobs, slimming down the executive board and changing the bank’s strategy. Former HSBC boss Noel Quinn joined as chair last month.
Julius Baer said on Tuesday it expected to exceed its previously announced SFr110mn gross cost savings target by SFr20mn by the end of 2025.
The bank scrapped medium-term profitability goals, instead introducing a target for net new money, a key metric for wealth managers. It said it was aiming to achieve a 4 to 5 per cent range for net new money growth by 2028.
Thomas Hallett, an analyst at Keefe, Bruyette & Woods, said the strategy update was “underwhelming” and that net new money and cost-income-ratio targets “fail to excite”.
Bollinger said: “Since January we have made a lot of progress on multiple fronts aimed at strengthening our organisation and the trust of all our stakeholders.”
Shares fell about 1.5 per cent in morning trading in Zurich.
