Swiss private bank Julius Baer has booked fresh loan-loss allowances of 149 million Swiss francs (about $184 million), drawing a line under a review of its credit portfolio launched after losses on real estate exposure. The new charge, announced on November 24, 2025, is tied mainly to income-producing residential and commercial property loans and marks what the bank describes as the final step in addressing legacy credit issues.
The bank said it is winding down a portion of its loan book that no longer fits its risk appetite or strategic focus, following earlier increases in provisions for borrowers in Switzerland and other European markets. In May 2025, Julius Baer had already raised allowances by 130 million Swiss francs, including exposure to the now-insolvent Degag Group in Germany, after a 586 million Swiss franc hit in 2023 on loans to collapsed property group Signa.
With the latest action, the Zurich-based wealth manager says it has completed the credit review it launched this year to clean up its balance sheet and refocus on core wealth management. The bank stressed that its Lombard lending and traditional Swiss mortgage books remain resilient, with the additional provisions concentrated in a narrower slice of its real estate portfolio.
Profit Outlook And Investor Reaction
While the bank sought to portray the write-down as a decisive step toward closing past problems, the added provisions weigh on earnings. Julius Baer said it now expects full-year 2025 net profit to fall below 2024 levels, reflecting the one-off impact of credit losses booked this year. Its shares were down around 3.5% in early Zurich trading, underperforming a roughly 1.2% rise in the broader European banking index.
Chief Executive Stefan Bollinger said the group is “not quite there yet” in terms of resuming share buybacks. The bank remains subject to an enforcement procedure by Swiss financial regulator FINMA over its past risk controls. According to the bank, any discussion with FINMA on a possible restart of share repurchases cannot begin before the end of February 2026, once incoming compliance chief Victoria McLean formally joins.
Analysts offered a cautious response. Research house Bank Vontobel highlighted an improvement in the cost-income ratio but flagged mixed trends between July and October, including slowing net new money inflows. Strategists at Citi said in a client note they expected the market reaction to remain negative in the near term, given the weaker profit guidance and regulatory overhang.
Risk Controls, IT Upgrade And Strategic Focus
Management argues that the completed review, combined with tighter risk frameworks, leaves Julius Baer better positioned to focus on its core franchise of serving wealthy clients. The bank said it has strengthened its risk function, refined its risk appetite framework and sharpened its emphasis on secured lending tied to clients’ liquid assets, a shift that Bollinger has pledged since taking office.
As part of this overhaul, the bank is investing in technology. Chief Financial Officer Evie Kostakis confirmed that Julius Baer plans a major IT infrastructure upgrade in Switzerland. Days before the latest announcement, Reuters reported that the bank had selected Swiss software provider Temenos to replace its ageing core banking system in the domestic market, extending a platform already used in Singapore and Luxembourg. The project is intended to improve regulatory reporting, risk monitoring and client service over the strategic cycle running to 2028.
Even after the write-down, the bank underlined that its asset base continues to grow. Assets under management reached 520 billion Swiss francs by the end of October 2025, supported by 11.7 billion Swiss francs in net new money so far this year and buoyant equity markets, which more than offset the drag from a stronger Swiss franc.
Expansion In Middle East Wealth Market
Alongside cleaning up its loan book, Julius Baer is pushing ahead with international growth plans. The bank said it has received in-principle approval to open a new advisory office in Abu Dhabi, adding to its presence in the Gulf region. The office, slated to open in December 2025, will focus on ultra-high-net-worth individuals, family offices and entrepreneurs in the United Arab Emirates and neighbouring markets.
For Julius Baer, the combination of a cleaner balance sheet, strengthened compliance under Victoria McLean, and upgraded systems based on Temenos software is intended to support renewed growth once the regulatory process with FINMA is resolved and market confidence stabilises.
