Julius Baer; CEO Exits, Capital Weakened

Julius Baer (BAER SW), the Swiss wealth company, is getting rid of the CEO in the wake of the Signa debacle, exiting private debt and reported lower capital levels.

• Signa, the Austrian CRE firm which declared insolvency in Nov-23, has generated a CHF586m loss for BAER and cost the CEO his job, it appears. BAER is also being investigated by Swiss regulators over its risk management practices.
• 2H23 results were actually not bad, ex-Signa. Net new money (key benchmark for these companies, was CHF5.4bn (2.4% growth rate) broadly in line with consensus and revenues, ex-Signa, were down 9% y/y but not miles below expectations. CHF strength was a headwind.
• Capital is not great; CET1 is 14.6% (down 90bp on Jun-23) and well below expectations nearer-16%. This is important for two reasons: the obvious cushion for creditors but also the implicit confidence it gives investing customers, especially in the wake of Credit Suisse events. Franchise damage can easily become an issue and we note deposit levels continue falling (as do loans, in fairness).

Conf call is 0830 London time at https://www.juliusbaer.com/en/media-investors/news/webcast/