Bank Julius Baer sees itself as a winner in CS crisis

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The Swiss financial center was a leader for decades. It was competitive, offering optimum framework conditions, security and discretion.

However, the Swiss financial center is currently in the middle of a hurricane. The urgent takeover of Credit Suisse by UBS, which is administered by the federal government using emergency law, has caused worldwide uncertainty.

“Switzerland’s status as a bank for the super-rich is not God-given,” warns Philipp Rickenbacher, 52, CEO of Bank Julius Baer, ​​in an interview with the “Financial Times.” He goes on to say that the Swiss government and regulators need to better communicate with relevant international investors.

Julius Baer crisis winner?

As a result of the merger of CS and UBS, Julius Baer became the second largest Swiss bank managing CHF 424 billion in private assets.

Rickenbacher explains that he has observed “a move of customers towards quality” in Switzerland. With the latter, he associates, first of all, his own bank. As wealthy account holders diverge from UBS and Credit Suisse, whose business models also include risky investment banking activities, they are increasingly turning to more traditional, more conservative Swiss banks. Just like Julius Baer, ​​who caters to the accounting and investment needs of wealthy private individuals.

Julius Baer’s share price has risen more than 12 percent since the March 19 bank earthquake. “Our model worked very well for us,” says Rickenbacher. To this end, Julius Baer is in talks with Credit Suisse employees who want to relocate both in Switzerland and elsewhere in Asia and Latin America.

Finally, Julius Baer could also take advantage of the fact that instruments like “too big to fail” can’t solve the CS problem. “My instincts and moral compass tell me that a private institute can fail,” Rickenbacher says. “I can humbly say that we are not too big to fail.” Julius Baer manages his risks and balance sheet very carefully.

Also not an innocent lamb

By the way, Julius Baer has a few scandals behind him. In 2020, the Swiss Financial Market Supervisory Authority (Finma) identified serious anti-money laundering shortcomings in Julius Baer between 2009 and early 2018. Also, Julius Baer has had to pay hundreds of millions of dollars in fines to US authorities in recent years.

Source :Blick