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March 22, 2022

Julius Baer outlines credit exposure to Russia

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict


Julius Baer is the most recent in the list of Swiss banks to detail their exposure to Russia, as the country continues to face stringent sanctions over its ongoing military attack in Ukraine.

The Zürich-headquartered bank disclosed credit exposure to a low-single-digit number of clients who were subject to recent sanctions.

Most of this exposure comes from mortgage loans at conservative lending values against residential properties in Western Europe and a marginal Lombard credit exposure fully covered by pledged liquid assets collateral, Julius Baer said in a statement.

The bank, however, said that its market risk exposure to Russia is ‘not significant and is tightly managed’. 

Last month, Julius Baer slashed the collateral value of Russian assets, including those traded on markets outside the country, to zero.

The bank said it assisted the affected clients to set the credit positions accordingly, without resulting in any credit losses to date.

The net asset value of Julius Baer’s Moscow-based advisory subsidiary, Julius Baer CIS, accounted for CHF0.4m as of the end of December. 

The bank said it has been complying with national and international sanctions and has not onboarded any new Russian clients since the invasion of Ukraine.

The bank added that it is planning to trim local activities in Russia in line with contractual agreements while ensuring the safety of its employees.

Julius Baer CEO Philipp Rickenbacher said: “I believe I speak for all my colleagues at Julius Baer when I express my sadness and concern for those affected by this deplorable act of aggression. This feeling is mirrored in the generous contributions by our employees to a recent fundraising initiative in support of the relief efforts for the most vulnerable civilians in this war. 

“Besides contributing financially to humanitarian help, Julius Baer is fully focused on managing all risks for the Group and its clients with the utmost discipline.”

Recently, Swiss banks Credit Suisse and UBS also reported market risk exposure to Russia.

Earlier this month, both firms triggered margin calls to their wealth management customers who use Russian debt as collateral. 

Meanwhile, the Swiss Bankers Association (SBA) recently revealed that Swiss banks may hold between CHF150bn and CHF200bn on behalf of Russian clients in offshore accounts.

These figures are said to be minimal in relation to overall assets held in the country, which is considered a safe harbour for stashing money by the world’s richest individuals.

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