Julius Baer’s chief govt and the chair of the governance and danger committee are each stepping down after the Swiss financial institution noticed its full-year income nearly halve resulting from 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 non-public debt enterprise fully and is winding down its remaining non-public 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 stated are Lombard loans – which use liquid property as collateral – and mortgage lending.
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The financial institution reported a 55 per cent year-on-year drop in adjusted web revenue of CHF 472m in its 2023 outcomes.
It stated this mirrored web credit score losses of CHF 606m, which incorporates the CHF 586m loss from its publicity to Signa.
Julius Baer stated 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 impression European business property sector
David Nicol, chair of the governance and danger committee of the board of administrators, is not going to stand for re-election on the 2024 annual shareholder assembly.
“Talking on behalf of your complete board of administrators, I deeply remorse that the complete loss allowance for the most important publicity in our non-public debt enterprise has considerably impacted our web revenue for 2023,”stated Romeo Lacher, chairman of Julius Baer Group
“Our 2023 outcomes replicate our willpower to finish any uncertainty relating to our non-public 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 stability sheet, and our strong underlying profitability. We’re refocusing our lending exercise on extra conventional areas, that are an essential a part of our wealth administration providing.”
Julius Baer is without doubt one of the greatest lenders to Signa. It stated final November that it was reviewing its non-public debt enterprise amid ongoing losses regarding its publicity to the developer.
Signa fell into hassle final 12 months amid wider challenges within the business 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.