Swiss private bank continues to struggle with investor confidence as asset base shrinks and credit risks resurface
Julius Baer, the prominent Swiss wealth management institution, is once again in the spotlight—and not for reasons it would prefer. On Tuesday, the bank’s shares took a significant hit, tumbling by nearly 5% on the Zurich Stock Exchange after the company disclosed an unexpected CHF 130 million (approximately €130 million) provision linked to a re-evaluation of its loan portfolio. The stock closed at 54.56 Swiss francs, reflecting growing investor unease over the bank’s financial health and strategic direction.
This latest disclosure forms part of Julius Baer’s financial update for the first four months of 2025, which offered a mixed bag of results. While some key operational metrics remained resilient, the market’s reaction made it clear that the negative aspects—particularly the new loan-related charge—overshadowed the positives.
A Disappointing Start to 2025
The update reveals that Julius Baer’s performance in the early part of the year is tracking below the levels achieved in the first half of 2024, setting a cautious tone for the remainder of the year. Management has already guided that first-half net profits are expected to come in lower than last year’s, owing largely to the impact of the newly announced provisions and a shrinking asset base.
Although the bank succeeded in attracting CHF 4.2 billion in net new money from clients between January and April—thanks in large part to strong demand from clients in Hong Kong, Singapore, the UK, and Germany—currency headwinds and lingering concerns over its loan portfolio took the shine off those inflows.
Julius Baer’s total assets under management (AUM) fell by 6% compared to the end of 2024, landing at CHF 467 billion. The depreciation of the U.S. dollar against the Swiss franc played a considerable role in this decline, illustrating how global currency movements can heavily influence the fortunes of internationally exposed private banks.
Profit Margins Improve Slightly—But at What Cost?
Not everything in the bank’s update was negative. Julius Baer’s adjusted gross margin—a key profitability measure—improved to 87 basis points in the first four months of the year, up from 80 basis points in the second half of 2024. This increase was attributed mainly to robust client inflows rather than an expansion in lending or investment performance.
Additionally, the bank’s Common Equity Tier 1 (CET1) ratio, a critical indicator of financial stability and resilience, rose to 15.2% from 14.2% at the end of 2024. Part of this boost stemmed from the sale of the bank’s Brazilian wealth management division to Banco BTG Pactual, which reportedly fetched just under €100 million. While this capital enhancement was welcomed by markets, it also signaled Julius Baer’s ongoing retreat from riskier or less profitable markets in favor of core operations.
Provisioning Rattles Market Confidence
The most concerning component of the update—and the primary reason behind the sharp decline in the bank’s share price—was the unexpected CHF 130 million provision. According to Julius Baer, this charge is related to a fresh review of credit exposures across its mortgage lending and private debt portfolios. The bank is now applying “more conservative criteria” in assessing the creditworthiness of borrowers and the quality of its wealth management relationships.
This cautious shift indicates that Julius Baer is trying to distance itself from riskier credit profiles after recent high-profile stumbles. The move may be prudent from a long-term risk management perspective, but it highlights how much fragility still lurks within the bank’s lending book.
“Adjusting risk parameters is never easy, especially when you’re still nursing wounds from past exposures,” commented a Zurich-based investment strategist. “Julius Baer is sending a message that it’s learning to be more prudent—but also that legacy risks haven’t fully disappeared.”
The Lingering Shadow of the Signa Collapse
The latest provision cannot be viewed in isolation. It comes just months after Julius Baer took a massive CHF 586 million hit related to its exposure to the now-defunct Austrian real estate group Signa. That debacle not only damaged the bank’s financial standing but also shook investor trust in its risk assessment protocols.
The Signa incident led to the complete shutdown of Julius Baer’s private debt operations, once a significant part of its lending business. While the bank has sought to move past that chapter, the new provisioning implies that residual risks—either from similar exposures or systemic weaknesses—continue to pose a threat.
This recurring theme of surprise charges and reactive adjustments paints a picture of a bank still trying to find its footing in a post-crisis environment. It also raises questions about whether Julius Baer’s internal controls and oversight mechanisms have evolved sufficiently to prevent similar issues in the future.
Restructuring Underway Under New Leadership
The responsibility for steering Julius Baer through this turbulent period now lies with its recently appointed CEO, Stefan Bollinger. Taking the helm amid one of the bank’s most challenging chapters in recent history, Bollinger has prioritized a comprehensive strategic realignment.
Central to this revamp is the reorganization of the bank’s global operations into three regional divisions—Europe, Asia, and the Americas—with the aim of improving operational focus and accountability. The new structure is intended to streamline decision-making, enhance client service, and sharpen risk management by giving local leadership greater autonomy.
While these changes are still in the early stages of implementation, they represent a broader acknowledgment that Julius Baer must adapt to an increasingly volatile and complex financial landscape. Whether this new structure will yield the intended efficiencies remains to be seen, but stakeholders are watching closely.
Investor Sentiment: Cautious and Wary
The market’s response to Julius Baer’s update makes clear that investor sentiment remains fragile. The combination of falling assets, rising provisions, and structural uncertainty has created a narrative of instability that the bank is struggling to shake.
Some analysts argue that Julius Baer’s fundamental business—wealth management for high-net-worth individuals—remains solid. Yet, the recurring financial hits and lack of clarity around credit exposure suggest that even core strengths are vulnerable without tighter oversight and disciplined execution.
“The core banking business is sound, but the missteps in credit have undermined investor confidence,” said a senior financial analyst at a Geneva-based asset manager. “They’re trying to draw a line under past mistakes, but they’re not quite there yet.”
What Lies Ahead?
Looking forward, Julius Baer’s path to recovery hinges on multiple factors. First, it must prove that its newly conservative credit criteria can restore balance and prevent further provisions. Second, it must maintain its momentum in client acquisition, particularly in Asia and Western Europe, to stabilize revenue flows. Finally, its ongoing restructuring must deliver tangible results—not just in cost savings, but in rebuilding a culture of measured risk-taking and strategic focus.
CEO Stefan Bollinger has emphasized that 2025 is a transitional year. But with shares already under pressure and earnings expected to come in lower than 2024, the margin for error is shrinking.
For now, Julius Baer remains a case study in how even legacy institutions with prestigious client rosters can falter without rigorous risk discipline. Investors will be watching the coming quarters for signs that the bank can regain its footing—and their trust.