Julius Baer’s executive board is undergoing a significant reduction, shrinking from 15 to just five members. CEO Stefan Bollinger expects this move to enhance agility, entrepreneurial spirit, and a strong client-centric approach—finews.ch reported on the changes.

At the same time, the new CEO signaled what lies ahead for the private bank’s employees: «We will apply the same principles throughout the entire organization. I am convinced that our clients and all other stakeholders will feel the difference,» he stated.

Approximately 5% of all positions (300–400 jobs) will be eliminated, primarily affecting back-office functions. Most of the layoffs will occur in Switzerland.

Cost/Income Ratio Remains Unsatisfactory

This move is unsurprising, as Julius Baer has been struggling with cost issues for some time.

At the beginning of 2024, the private bank increased its cost-cutting target for the 2023–2025 program from CHF 120 million to CHF 130 million (gross). According to figures presented on Monday, Julius Baer had already achieved gross cost savings of CHF 140 million by the end of 2024. The total accumulated restructuring costs related to the program amounted to CHF 39 million, with CHF 24 million booked in 2024.

Despite these efforts, the cost/income ratio remains unsatisfactory, standing at 70.9%—far from the originally set target of below 64% for 2025.

Additional Cost Saving Needed

As a result, the bank has decided to expand its ongoing cost-cutting program. By the end of 2025, it aims to achieve additional gross savings of CHF 110 million on a run-rate basis, focusing on personnel and operating expenses. The costs associated with achieving these savings are currently estimated at approximately CHF 55 million, which will likely be booked in 2025.

Strategy Update Before Summer

At the same time,  Julius Baer is refining its strategy. The bank announced on Monday that it will present a strategy update, including new mid-term targets, before summer 2025. Further details, including the exact timing, are expected to be disclosed alongside the release of the 2024 annual report on March 17, 2025.

AuM at a Record High

Despite cost-cutting measures, the bank’s strong asset growth remains notable. In 2024, assets under management (AuM) rose by CHF 70 billion (+16%) to a record CHF 497 billion.

This growth was driven by equity markets, positive currency effects—particularly due to the depreciation of the Swiss franc against the U.S. dollar—and net new money inflows.

Net new money inflows accelerated significantly in the second half of the year. Average monthly AuM rose by 7% year-over-year to CHF 467 billion. Including CHF 93 billion in custody assets (AuC), total client assets grew by 15% to an all-time high of CHF 590 billion.

Net new money inflows improved to CHF 14.2 billion, marking a 14% increase compared to the previous year.

Higher Operating Expenses

In 2024, operating income rose by 19% (+CHF 621 million) to CHF 3,861 million. Julius Baer noted that in the previous year (2023), operating income had been negatively impacted by a significant increase in specific provisions related to the group’s largest private debt credit exposure.

IFRS-based operating expenses increased by 3% to CHF 2,807 million. A 5% increase in personnel expenses (CHF 1,789 million) and a 2% rise in adjusted amortization and impairment charges on intangible assets (CHF 145 million) were partially offset by a 2% decline in depreciation on properties and equipment. 

As a result, IFRS net profit surged to CHF 1,022 million (+125%), while earnings per share attributable to shareholders rose to CHF 4.98 (+125%), largely due to the release of significant tax provisions. The board of directors will propose an unchanged dividend of CHF 2.60 per share at the annual general meeting on April 10.