Julius Baer to Cut Workforce by 5% Amidst CEO's Restructuring Plans
Swiss bank Julius Baer is set to reduce its workforce by 5% in a strategic move under new CEO Stefan Bollinger, aiming to save 110 million Swiss francs.
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In a move to streamline operations and tackle cost inefficiencies, Swiss bank Julius Baer has announced plans to cut its workforce by 5%, equivalent to approximately 400 jobs. This decision forms part of a series of cost-saving measures introduced under the leadership of new CEO Stefan Bollinger. The bank, facing challenges from its prior exposure to the failed property group Signa, is targeting savings of 110 million Swiss francs ($120.1 million).
The announcement follows a difficult year for Julius Baer, which reported a lower-than-expected pretax profit for 2024, causing its shares to fall by more than 8%. To counteract these financial stresses, Bollinger emphasized the need for a leaner leadership structure. The executive board is set to shrink to five members, promoting enhanced accountability and streamlined decision-making processes throughout the organization.
Strategic Adjustments Underway
Bollinger, who stepped into his new role last month, is focused on instilling a discipline-driven culture. "This is the first move to create a leaner, more straightforward way of running our business," he stated. By implementing these foundational changes at the upper echelons, the company hopes to instigate a trickle-down effect across all its operations.
Despite assets under management rising by 16% to reach 497 billion francs, analysts from Bank Vontobel have described the overall financial results as mixed, citing an adjusted pretax profit that fell 3% short of consensus expectations. The bank's cost-income ratio stood at 70.9% for 2024, which it acknowledged as unsatisfactory, signaling further efforts are needed to meet its projected target of sub-64% by 2025.
Market Reactions and Future Directions
In response to the bank's ongoing recalibrations, investor sentiment has remained cautious, as evidenced by the share price dip. Additionally, Julius Baer has opted against launching a new share buyback program, focusing instead on stabilizing its core operations and reinforcing its financial foundations.
The introduction of these strategic measures by Bollinger is being closely watched in financial circles, with stakeholders eager to see if these steps will provide the necessary momentum to restore the bank's profitability and cement its reputation as a leading wealth management institution.
