This content was published on
July 2, 2026 - 15:40
4 minutes
(Bloomberg) — The Swiss wealth management firm Julius Baer Group Ltd. is moving toward a restoration of normal business after more than two years dealing with the fallout from losses linked to Austrian property tycoon Rene Benko.After winding down business lines, laying off staff and combing through their client book, executives at the Zurich-based bank are now preparing for steps to boost growth again, according to people familiar with the matter. Among those is an end to a ban on on-boarding certain higher-risk categories of client — so-called politically exposed persons — the people said, asking not to be named discussing private matters.The shift is being supported by progress in wrapping up an investigation by Swiss regulator Finma, which has dominated Chief Executive Officer Stefan Bollinger’s 18 months in charge. Insiders view that procedure, prompted by the risk-control failures at the heart of the $700 million losses on loans to Benko’s companies, as in its final practical stages.A formal end, which would enable Baer to restart share buybacks, is expected to follow in the second half of this year depending on the final decision of the regulator, the people said. Shares of the lender extended gains on the news, rising 2.9% at 3:38 p.m. in Zurich.“Julius Baer continues to implement the group’s comprehensively revised risk and compliance framework,” a spokesperson for the bank said. “We are taking a proactive and transparent approach and are working constructively with Finma to close the matter on a timely basis. Any assumptions regarding the outcome or timing of the enforcement proceeding are pure speculation at this point in time.”Finma declined to comment on the investigation.With its business strongly focused on classic wealth management globally, Baer relationship managers in many regions have been hamstrung by restrictions on bringing on new clients amid a review of its client book pushed forward by Bollinger and Chairman Noel Quinn. In some regions, a ban on PEPs — wealthy people who may have positions or connections that make them at higher risk of corruption — can hamper new business.Julius Baer is the top listed pure wealth manager in Switzerland, with more than $500 billion in assets under management. The collapse of Benko’s real estate empire however exposed the fact that the bank had run up hundreds of millions of dollars in loans to essentially a single client. The resulting write-offs cost the then-CEO Philipp Rickenbacher his job along with other senior executives. A multi-year restructuring program has been the defining feature of Bollinger’s term so far — largely backed by investors, with shares up about 12% this year.It’s not yet clear whether Baer will face penalties or further restrictions as a result of the Finma investigation. While the regulator doesn’t have the power to hand down punitive fines, it can confiscate profits deemed to have been made illegally and issue bans on individuals practicing in the industry.In the wake of the Benko scandal, Julius Baer closed the “private debt” business that had made the loans and reorganized its risk-control framework. The review of the lending book, undertaken by an outside party, has coincided with the bank letting some categories of clients go altogether. In December, Bloomberg reported that Baer had told clients with lower balances to either increase the amount of funds held with the firm or go elsewhere.Swiss private banks have faced a period of higher scrutiny since the collapse of Credit Suisse in 2023 and a slew of other scandals related to money laundering. HSBC Holdings Plc’s Geneva-based private bank ended relationships with more than 1,000 Middle Eastern clients in 2025.The clean-up has taken its toll on Baer’s profitability, and client inflows also slowed in the first four months of this year. The bank said in May that it still expects profit for the first half of 2026 to be “substantially higher” than last year.–With assistance from Jan-Henrik Förster.(Updates with share reaction in fourth paragraph.)©2026 Bloomberg L.P.
