Julius Baer; Signa Losses Reported Up To CHF400m. More Bad News for Swiss System.

Julius Baer (BAER SW) set to announce major Signa-related write-off with Thursday’s results, acc to press.

• Signa, the Austrian CRE firm, declared insolvency on 29-Nov-23 and, since then, BAER had indicated it had CHF606m of exposure, reportedly the largest single position in its private debt book.
• BAER issued a profit warning on 27-Nov-23 indicating an expected loss of around CHF70m and Reuters is now reporting that this loss could be as much as CHF400m. The Swiss regulator, FINMA, is already investigating BAER over “ inadequate risk-control structures”, according to BBG.
• BAER’s cash curve is little disturbed today but is meaningfully wider YTD. The wider issue is, post-Credit Suisse events from last Spring, further reputational damage for Swiss wealth-focused banks can be an issue for primary, beyond those already seen in Swiss AT1 world, let alone new client generation.