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Philipp Rickenbacher started in 2019 to do it differently. Under the previous managing directors Bernhard Hodler and Boris Collardi, Julius Baer was involved in numerous scandals.
At the beginning of 2020, the financial market supervisory authority Finma announced that there had been “serious deficiencies in the fight against money laundering” at the bank between 2009 and 2018 – key words are corruption cases involving the Venezuelan oil company PDVSA and the football association Fifa. The bank had misjudged the risk.
Group profits collapse
But under the now 53-year-old biotechnologist with an ETH degree and ex-McKinsey man, things were no different: Julius Baer also took risks under Philipp Rickenbacher that are difficult to understand.
It has to write off 606 million francs in loans that Julius Baer granted to the Austrian entrepreneur René Benko and his opaque Signa empire. Group profits fell by 52 percent from over a billion francs last year to 454 million francs.
Limit and monitor risks
The law also stipulates that this is not simply at the discretion of the banks. Article 12 of the Ordinance on Banks and Savings Banks states: “(The bank) must in particular record, limit and monitor market, credit, default, settlement, liquidity and image risks as well as operational and legal risks.”
As the “Sonntagszeitung” reported in December 2023, René Benko’s former finance chief apparently promised that he would contribute a substantial part of his private assets to Julius Baer. To this end, Julius Baer acted as an investment bank when taking over Globus in 2020 and 2021 at the Selfridges department store. The bank continued to grant loans and accepted Signa shares as collateral instead of Benko’s private assets. When Signa Holding filed for bankruptcy at the end of November 2023, the shares lost drastically in value.
CEO Philipp Rickenbacher is leaving
Chairman of the Board of Directors Romeo Lacher said it in a webcast on Thursday: “We misjudged the risk.” The consequence is that CEO Philipp Rickenbacher is leaving the bank with immediate effect. The chairman of the risk committee of the board of directors, David Nicol, will also no longer take part in the 2024 general meeting.
The bank is thus sending a signal to the outside world. But the basic problem remains: Julius Baer repeatedly misjudges risks. The question arises: will this change?
Why does this happen to a bank like Julius Baer, which advertises on its website with the words: “Everything we do is based on very high standards and we run our company with a long-term focus”? The answer is: The bank has, once again, misjudged the risk. Also considering that it is in the DNA of banks to take risks in order to make money. However, the question is always how high and calculable these risks are.
Liz Horowitz
Business editor
Open the people box. Close the people box
Liz Horowitz works as a business editor and documentary filmmaker at SRF.