Swiss private banking group Julius Baer is planning to slash 300 jobs after its net profit slumped 37% to CHF465m in 2019 on a year-on-year basis.
The job cuts are part of CEO Philipp Rickenbacher’s three-year plan to improve the bank’s profit margins.
The bank now plans to “shift from an asset-gathering strategy to one focused on sustainable profit growth”.
Julius Baer eyes CHF200m in cost cuts over the next three years.
It intends to make the cuts by reviewing its geographic presence depending on growth potential, simplification, and improvement of operational excellence.
The plan also includes a reduction in its cost-income ratio to 67% by 2022 from the earlier target of 68%. In 2019, the private bank’s cost-income ratio stood at 71%.
Moreover, Julius Baer intends to enhance its offering for HNWI and UHNWI and increase technology investments.
Plans are on to increase technology investments by nearly 20% in 2020 and 2021.
2019 performance highlights
The bank’s performance in 2019 was hit by a CHF153m provision set aside to pay for claims made by BvS related to missing funds in the 1990s as well as a goodwill impairment charge of CHF99m related to Italian asset management subsidiary Kairos.
Net new money was CHF10.6bn. The performance was affected by significant outflows at Kairos.
Net inflows and global market recovery led to a 12% growth in assets under management to CHF426bn.
Operating income increased to CHF3.38bn from CHF3.37bn. Operating expenses of CHF2.82bn in 2019 were 14% higher than the previous year.