Julius Baer to buy back up to CHF600 mln in shares after regulatory scrutiny

Swiss wealth manager Julius Baer announced on Friday its intention to repurchase up to 600 million Swiss francs of its own shares, as it strives to overcome regulatory scrutiny and legacy issues that have impacted the company. The decision, approved by the bank's board following regulatory consent, is contingent on favorable market conditions and is expected to commence within the next few weeks, concluding within a year. The share buyback will be carried out via a secondary trading line on the SIX Swiss Exchange.

In addition to the share repurchase, Julius Baer revised its capital distribution policy, maintaining its dividend payout target at 40% to 60% of IFRS net profit attributable to shareholders. The bank aims to gradually increase the dividend per share, except in exceptional circumstances. The group has also set its target common equity tier 1 (CET1) capital ratio at 15%, which aims to return surplus capital to shareholders while preserving a capital buffer.

The share buyback follows a significant enforcement case conducted by Swiss regulator FINMA this week. The regulator concluded that Julius Baer had serious breaches in risk management and anti-money-laundering controls, primarily linked to a private-debt exposure and dealings with two Russian politically exposed persons. In response, the bank has revamped its risk and compliance framework and dismantled its private-debt business.

Chairman Noel Quinn stated that management has made substantial progress in addressing the legacy issues and has continued to engage with regulators throughout the process.