Julius Baer Hits Reboot to Escape Swiss Banking’s New Malaise
After a series of missteps, the private bank’s management is pledging to rein in risk.
Photo Illustration: 731; Photos: Getty Images
A year ago, as UBS Group AG was dissecting the remains of Credit Suisse after its emergency takeover of the troubled lender, the executive team at another top Swiss private bank jumped to reassure clients of its stability. Philipp Rickenbacher, then the chief executive officer of Julius Baer Group Ltd., told his wealthy customers that the 133-year-old institution had “a laser focus” on getting through a historic upheaval for Swiss finance. The bank’s balance sheet was “rock solid” and adhered “to the highest risk-management standards,” he wrote in a letter to clients.
Rickenbacher’s comforting words soon rang hollow. As he penned his missive, Baer was sitting on some $700 million in exposure to a single, soon-to-be-bankrupt client: Austrian real estate tycoon Rene Benko. When Benko’s empire of luxury department stores and posh hotels crumbled last year, so did Rickenbacher’s credibility. The bank announced his departure on Feb. 1.