Swiss banking giant Julius Baer to lay-off nearly 400 employees
What's the story
Swiss banking giant Julius Baer has announced plans to cut its workforce by around 5%. The layoff is as part of a cost-saving strategy launched by the new CEO, Stefan Bollinger.
The decision comes after the bank suffered significant financial losses due to its involvement with the now-defunct property group Signa.
The job cuts are expected to save the bank nearly CHF 110 million ($120 million).
Financial fallout
Julius Baer's shares plummet following disappointing profit report
Julius Baer's shares fell sharply by over 8% after the bank reported a lower-than-expected pre-tax profit for 2024.
The bank also announced plans to reduce its executive board to just five members.
Bollinger, who took over last month, believes this new leadership structure will improve accountability and instill discipline from the top down.
Restructuring plan
CEO Bollinger aims for a leaner business model
Bollinger has detailed his vision for a leaner, more efficient business.
"This is the first move to create a leaner, more straightforward way of running our business. We are going to apply the same principles through the entire organization," he said.
The job cuts, if proposed, would impact some 400 employees, confirmed operations chief Nic Dreckmann.
Financial targets
Julius Baer's cost-income ratio remains unsatisfactory
Julius Baer's cost-income ratio in 2024 stood at 70.9%, which the bank considered "still unsatisfactory." This is way above its target of under 64% for 2025.
Along with these financial woes, the bank has also opted against starting a new share buyback program.
Despite a 16% surge in assets under management to CHF 497 billion, Bank Vontobel analysts called the results mixed, citing an adjusted pre-tax profit that missed consensus expectations by 3%.