On his first day as CEO, Stefan Bollinger told Julius Baer’s team that they shouldn’t be afraid to talk and look for him if there was something that needed to be changed. He received more than 1,000 emails.
The answer reinforces the climate in a historic institution that was stained by a series of scandals – and that Bollinger, a two -decades veteran of Wall Street Goldman Sachs giant, was hired to fix it. A few weeks after taking over in January, he reduced most of his management team and introduced a co-leading structure for various management functions, another Goldman-style innovation.
But after five months in office, amid a reformulation considered “unsatisfactory” by an analyst, bad news of the past and internal resistance continues to complicate their plans for the future. A regulatory investigation into the loss of $ 700 million from the institution due to the collapse of Rene Benko’s Real Estate Empire, a inherited money laundering penalty, and another real estate loans are some of the ghosts that Bollinger and the new president, Noel Quinn, need to eliminate before moving the goal of making baer “the world’s most admired heritage manager”.
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In interviews with former and current employees, who requested anonymity to discuss confidential information, comes a bank of a bank fighting for balance, while a different, energetic management style – emphasizing individual responsibility and risk control – finds a more consensus -based mindset. Bollinger’s arrival energized some areas of the 135 -year -old bastion in Zurich, but alienated others. How far it can lead to the transformation of Swiss bank culture – and how long investors will give you – it will be critical to your chances of success.
“No organization can be successful without the right culture,” Bollinger said on the bank’s investor day earlier this month, adding that he intends to promote a focus on “performance and responsibility.”
A Julius Baer spokesman refused to comment.
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The statements – and the fact that he held the event in London, something unprecedented for the Swiss firm – reinforce the evidence of a new tone under Bollinger, the first CEO since 2009 to join outside Julius Baer. Former Private Heritage Management Co-Cloving for Europe, the Middle East and Africa at Goldman in London, the 50-year-old businessman seeks to resolve failures that have plagued Julius Baer for years: the search for growth at the expense of risk management and lack of responsibility for errors.
Since 2015, the Bank of Zurich has had contacts with US officials for its role in FIFA’s money laundering scandal. It was implied in the corruption scandals in PDVSA, the Venezuelan oil company, which resulted in the arrest of one of its bankers. Former CEO Boris Collardi left office in 2017 after leading a rapid expansion in Latin America.
Philipp Rickenbacher left the main position after the Benko case, but the issue has not yet been resolved. Julius Baer is under investigation by Swiss regulator Finma for lapses in the management of risk related to Benko signs. At the center of the investigation is the internal structure that allowed a unique client to pass unnoticed.
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The announcement of the Signa investigation in February caused a 13% drop in shares, as the market realized that an expected stock repurchase program was now even further. Investors who have had shares a decade ago were rewarded with a digit price gain, albeit modest.
Ensure that Finma’s investigation advances quickly so that Bollinger can focus again on returning money to shareholders is among their priorities. However, the weight of regulatory issues may make it difficult to reduce costs as planned. He had already had to soften a goal of efficiency inherited from the previous management.
Bollinger’s mission is complicated by interests rooted inside the bank. According to a source familiar with the subject, these interests reach the board of directors. The arrival of another powerful outsider, the former CEO of HSBC, Noel Quinn, as president, should shake a mindset of “we always did that,” the source said.
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“Noel Quinn said there is a culture that needs to change,” said Andreas Venditti, bank analyst at Bank Vontobel in Zurich. “They realized that there is something wrong that needs to be faced.”
Bollinger’s career has so far focused on customers – essential in the assets management business – but he has no previous experience in managing a large bank. Since assuming, she has been dedicated to knowing customers and building relationships with investors and regulators.
In his first week, the new CEO traveled to Geneva, Singapore, Hong Kong and Dubai, according to a publication on his LinkedIn. He slept on the plane instead of hotels during the lightning tour, according to another source familiar with the subject.
Internal stakeholders say they have not seen him much, which may have encouraged resistance to some of his proposals. An attempt to change the compensation structure of relationship managers, for example, did not advance, two people said familiar with the subject.
“Julius Baer’s regional heads are very powerful, and perhaps it was inevitable to resist Bollinger’s reforms,” Venditti said.
Some of Bollinger’s Goldman-style innovations seem to solve cultural problems, such as introducing co-leadership structure for some management positions, to share power and avoid feuds, or promote ownership of stocks even in lower positions. Encouraging employees to speak openly is another cultural feature he brought from Goldman.
Internal cleaning has received compliments from employees who want a new start. At the same time, some accuse him of not understanding how Baer’s culture works and not being dedicated to meeting her, two people said.
Quinn’s support is critical to Bollinger in this regard. Julius Baer’s first president who is not Swiss led a series of strategic reviews at HSBC and has exactly experience in managing complex stakeholders, such as the challenge Bollinger faces now.
The two had a reminder that the bank’s past continued to haunt it in May, when Julius Baer had to reveal a financial penalty of a money laundering case from six years ago and a non-disclosed 130 million Swiss francs (about $ 160 million) on real estate loans.
The impact has brought out memories of the Benko scandal, which has shook the institution in the last two years. As rumors about the Austrian investor’s problems increased in the second half of 2023, the internal environment began to change remarkably, according to two former employees. People were agitated and nervous. There was also a reluctance to question the authority, either because he believed that nothing would change or for fear of repercussions, said one person.
In a few months, Julius Baer had to settle all the exhibition to Benko and the signs, to dispense with Rickenbacher and then -president Romeo Lacher, and announced that he would completely leave the private credit business.
Despite these difficulties, the bank’s new leadership may point out that, for now, investors still maintain hope. The company’s price/equity value index, an investor confidence measure from their perspectives, is still higher than that of neighboring UBS.
Julius Baer, Bollinger said this month, “has a strong brand, excellent people, a solid business model. This franchise has all the ingredients to take advantage of future opportunities.”
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