Posted By Global Banking and Finance Review
Posted on May 21, 2025
ZURICH (Reuters) -Julius Baer's announcement of a 130 million Swiss franc ($156.36 million) writedown sent the Swiss bank's shares tumbling more than 5% on Wednesday, putting it on the back foot as its new management seeks to turn the page on past setbacks.
Julius Baer revealed the net charge late on Tuesday after a review of its credit portfolio. The hit followed losses of 586 million Swiss francs which the bank made public early last year, leading to the management shake-up.
The writedown was in an interim management statement for the first four months of 2025 in which the bank said Ivan Ivanic would replace Oliver Bartholet as chief risk officer.
Addressing the writedown, CEO Stefan Bollinger said the bank does not expect additional major credit losses.
"While the review is ongoing, based on our findings to date, we do not expect to uncover additional material idiosyncratic risks that could lead to significant credit losses," Bollinger told reporters on a media call.
Shares in the Zurich-based lender and wealth manager fell 5.8% after opening and trading was briefly suspended.
"The large increase in credit provisions is a negative surprise," Vontobel analyst Andreas Venditti said in a note. The bank's lending business might need to undergo further refinements, he added.
The 130 million francs in credit losses were across the remainder of the private debt book that the bank wound down ahead of plan and certain positions in the market book which it was reviewing, said Julius Baer Chief Financial Officer Evie Kostakis.
"We can confirm that it's several facilities across several clients across the remainder of the private debt book and the mortgage book," she added.
Kostakis said Julius Baer could not comment on when Swiss financial market regulator FINMA would publish results of an ongoing enforcement procedure that became public in February.
The matter was in FINMA's hands, she said, reiterating the bank did not envisage any share buyback programs before the review was complete.
(Reporting by Ariane Luthi, editing by Dave Graham, Rachel More and Jan Harvey)
