Julius Baer stock has worst day in a decade as results disappoint

By Ariane Luthi

ZURICH (Reuters) -Swiss bank Julius Baer shares plunged on Monday after new Chief Executive Stefan Bollinger's plans to cut its workforce by about 5% and shrink its executive board failed to offset concern about the outlook.

Baer's shares lost over 13%, putting the bank on track for its worst day in a decade after it reported a 2024 pretax profit that fell short of expectations.

The wealth manager said it targeted savings of 110 million Swiss francs ($120.1 million) and would reduce the executive board to five members from 15 with immediate effect.

Bollinger, who took over last month after his predecessor was ousted over heavy losses linked to failed property group Signa, 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 against 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, Julius Baer 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 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 completing the review and was not envisaging any M&A activities but was focused on organic growth, CEO Bollinger said.

The bank said it would provide a strategic update before summer 2025 without specifying when.

($1 = 0.9159 Swiss francs)

(Reporting by Ariane LuthiEditing by Dave Graham, David Goodman, Susan Fenton and Barbara Lewis)