Reduced pricing implemented by the latest leader of Julius Bear Company.
Julius Bär's New Captain: Aimen' Reign of Austerity
Stefan Bollinger, the fresh face of Julius Bär, isn't mincing words. The new CEO is tightening the purse strings, aiming to save a staggering 130 million Swiss francs by 2028 - the same amount earmarked for cost-cutting in 2024. With a stern demeanor, Bollinger stated, "We're not here to meander; we're here to command." During a recent investor call, he reaffirmed the ship's course, adding, "We can do it." These statements came on June 3. The total cost-cutting measures announced since 2022 now exceed 400 million Swiss francs [2][4].
The Hard Nosed Math:Julius Bär now targets a reduced adjusted cost-income ratio below 67 percent by 2028, down from 70.9 percent in 2024. While the previous medium-term target was 64 percent, Bollinger stressed, "We're not promising the world, we're delivering it." Some might call it bold, others might call it back-to-basics business [4]. Investors, however, seemed less than enthused. The stock took a 2 percent dive soon after [2].
Digging Out of a Financial Hole:Bollinger inherits a bank that, in early 2024, was bogged down by net credit losses of 606 million Swiss francs. Most of this could be traced to the Signa collapse, with Julius Bär being one of the largest creditors of the Austrian investor René Benko's real estate group [3]. The aftermath saw CEO Philipp Rickenbacher stepping down, followed by President Romeo Lacher's resignation [3].
Back to the Roots:Noel Quinn, the new board president, aims to return the bank to its asset management roots. While the bank's financial performance has been a mixed bag in recent years, Quinn pinned the blame on excessive lending, acknowledging that the bank lacked the necessary expertise in that area [3].
The Risk Taker:During his first months in office, Bollinger conducted a thorough examination of the credit portfolio, unearthing potential problem cases. Subsequently, additional loan loss provisions of 130 million Swiss francs were taken [3]. Bollinger stressed the importance of improved risk management, citing his two decades of experience in a risk-obsessed organization [3].
The Drive for Growth:Despite the emphasis on cost cutting, Bollinger hasn't forgotten about growth. Julius Bär aims to boost new money growth to reach 4 to 5 percent of assets by 2028. To achieve this, Bollinger intends to lighten the load of advisors by reducing administrative tasks, allowing them more time for clients [3]. The bank also plans to recruit around 150 new client advisors annually [3]. Bollinger reiterated, "We're going to empower our veteran advisors to actively contribute to growth." [3]
Acquisitions aren't currently a priority - the focus is on organic growth. [3]
In line with his commitment to austerity, Julius Bär's CEO, Stefan Bollinger, is focusing on reducing costs in the finance sector, aiming to achieve a reduced adjusted cost-income ratio below 67 percent by 2028, a move that some may consider a return to business basics. Meanwhile, Bollinger is also driving for growth, aiming to boost new money growth to reach 4 to 5 percent of assets by 2028, with strategies such as streamlining administrative tasks for advisors and recruiting 150 new client advisors annually.
