(Bloomberg) -- Julius Baer Group Ltd. Chief Executive Officer Philipp Rickenbacher said that the bank isn’t adjusting its willingness to take risks, even if it makes changes to the unit that ran up a $700 million exposure to the crumbling Signa empire.
“I believe Julius Baer will be able to continue its risk appetite and risk capacity as we have on average in the last few years,” Rickenbacher said at the FT Global Banking Summit in London on Wednesday. “Every time whenever we had losses — and this is certainly a significant case — every time we take the learnings and look deeply into it and we want to emerge stronger.”
Earlier this week, the Zurich-based bank said it was reviewing its private debt business and confirmed an exposure of 606 million Swiss francs ($693 million) to a single client, identified by people familiar with the matter as the Austrian real estate tycoon Rene Benko. The bank’s shares have fallen for eight straight days on uncertainty over its links to the conglomerate.
Read More: Signa Files for Insolvency as Cash Crunch Fells Luxury Empire
The bank said that 70 million francs in loan-loss provisions it booked in early November were primarily related to that exposure and said it will make further provisions if needed.
Markets exhibit “a certain nervousness and that’s why we decided this Monday to offer substantial additional information and a lot of transparency, creating clarity on the situation,” Rickenbacher said. Giving the size of the overall exposure gave “an outer-most boundary” in terms of potential losses, he added, though that doesn’t take into account the value of collateral.
Signa filed for insolvency after a last-ditch attempt to raise emergency funding failed. The firm made the filing on Wednesday in Vienna with the goal of managing its restructuring as a debtor-in-possession, the company said in a statement.
Rickenbacher is targeting $1 trillion in assets managed for wealthy clients as he seeks to position Baer as the main rival to UBS Group AG in Switzerland. To help reach that goal, Rickenbacher expects to make 200 gross hires this year, the largest hiring spree since Baer’s acquisition of Merrill Lynch’s international wealth business in 2012.
Rickenbacher was appointed CEO of Baer in July 2019, when he took over from Bernhard Hodler, the former compliance chief who helped clean up the bank after a money laundering scandal that cast a shadow over the boom years under his predecessor Boris Collardi. Baer enjoyed stellar growth through high-profile acquisitions and a hiring spree under Collardi.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
Author: Myriam Balezou
