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Over the weekend SonntagsBlick reported how the Julius Baer bank was going after the faltering Signa Group of billionaire René Benko (46). Now the bank is trying to make things right.
In his statement before the stock market opened on Monday, Julius Baer wrote that measures were taken to protect the bank’s interests and preserve the value of the collateral provided.
With the publication of the interim report for the first ten months, the Zurich private bank reported impairments of 82 million francs, of which 70 million in November.
Julius Baer now confirms that this amount relates primarily to the single largest exposure on its private debt loan book. However, the name of the debtor is not clearly stated. The commitment amounts to 606 million francs and includes three loans to different entities “within a European holding company”. The loans are secured by multiple collateral packages linked to commercial real estate and luxury retail. The undertaking will now be restructured in the long term.
Julius Baer stressed that if further value adjustments are required, these will continue to be recorded “prudently”. The bank calculates that in a hypothetical scenario of total loss, the group’s pro forma CET1 capital ratio would be above 14 per cent at the end of October 2023. Julius Baer would therefore remain significantly profitable.
Philipp Rickenbacher (52), CEO of Julius Baer Group AG, says in a statement: “We regret that individual commitment has led to the current uncertainty of our stakeholders.”
Will this insurance disappear? The fact that at least one of the three loan tranches is covered by guarantee is a big question mark. “A source familiar with the matter” tells Swiss financial portal Tippinpoint. The collateral is said to be shares of the Benko empire, which have already lost a lot of value. If other parts of the company go bankrupt, the value of the shares could drop to zero.
If the entire 200 million unstable loan tranche had to be written off, the bank could face even more significant losses. (SDA/rae)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
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