Julius Bär Group AG
TypePublic (Aktiengesellschaft)
SIXBAER
IndustryFinancial services
Founded1890; 131 years ago (1890)
FounderJulius Bär
HeadquartersZurich, Switzerland
Key people
Romeo Lacher (Chairman)
Philipp Rickenbacher (CEO)
Dieter Enkelmann (CFO)
ProductsPrivate banking, wealth management
IncreaseCHF 3.583 billion (2020)[1]
IncreaseCHF 943 million (2020)
AUMIncreaseCHF 486 billion (2021)[2]
Total assetsIncreaseCHF 113.578 billion (2021)[3]
Total equityIncreaseCHF 6.725 billion (2021)[3]
Number of employees
Increase6,667 (FTE 2021)[4]
Websitewww.juliusbaer.com

Julius Bär Group AG, known alternatively as Julius Baer Group Ltd., is a medium-sized private banking corporation founded and based in Switzerland. Headquartered in Zürich, it is among the older Swiss banking institutions. In terms of assets under management, Julius Baer is number three among Swiss banks after the two generalists UBS and Credit Suisse and the biggest pure-play private bank.[5]

Established as a traditional private bank and named after Swiss banker Julius Bär, it provides investment management, real estate financing, wealth management, and select offerings in sales and trading based on an open and managed architecture. The majority of income is generated by commissions and service fees.[6] Located in 28 countries, it is known for its banking secrecy and client confidentiality. Julius Baer employs a staff of over 6,600 worldwide.[7]

The group manages assets for private clients from all over the world. The firm's services consist mainly of wealth management and investment consultancy. The bank provides products via its open architecture platform as well as securities and foreign exchange trading. The shares of the Julius Baer Group are listed on the SIX Swiss Exchange and form part of the SMI MID, the mid-cap stock index comprising the 30 largest and most liquid listed Swiss companies not in the SMI.

History

Julius Baer Group branch office in Frankfurt
Julius Baer Group branch office in Frankfurt

Julius Bär Group Ltd. is a Swiss private banking group which is the parent company of Bank Julius Baer, a traditional private bank based in Zurich, Switzerland. The firm dates itself back to 1890 [8] when an exchange office was founded by Ludwig Hirschhorn and Theodor Grob. Grob left the firm again in 1896 when at the same time Joseph Michael Uhl and Julius Bär joined. In 1901, Julius Bär acquired the bank and remained as partner until 1922. Hans E. Mayenfisch joined the bank on 1 July 1913 as partner and was active until 1947. The sons of Julius Bär became partners as follows:[9] Walter Bär on 1 October 1913 until 1947, Werner Bär in 1921 until his death on 2 February 1960 and Richard Bär, who was a physicist became a silent partner in 1922. After his death in 1940 he was succeeded by his widow Ellen Bär.

The members of the 3rd generation became active in the bank with Hans Bär[10] on 21 August 1947 until 1996, last as chairman of the board of Julius Baer Holding Ltd, Nicolas Bär on 22 September 1951 until March 1993, last as Chairman of Bank Julius Baer & Co.Ltd, Peter Bär on 1 November 1955 until his death on 11 November 1998 last as member of the board of Julius Baer Holding Ltd., and Rudolf Bär 1969 until 2005,[11] last as member of the board of Julius Baer Holding Ltd. Hans Bär was succeeded as Chairman by Thomas Bär 1996 until 2003.[12] On 4 July 1970 Dr. Ernst Bieri,[13] former head of the finance department of the City of Zurich joined as outside partner until 1990 as member of the board of Julius Baer Holding Ltd.

Since 1980, the Bank has gradually opened up to non-family investors until it became a listed public company in 2005. In September 2005, the bank acquired the formerly independent private bankers Ferrier, Lullin & Cie SA, Ehinger & Armand von Ernst AG, Banco di Lugano and the asset management house GAM (Global Asset Management) from UBS,[14] making it one of the largest independent asset managers in Switzerland. In 2012, the bank acquired Merrill Lynch's wealth management business outside the US from Bank of America.[15] The 4th generation was involved with the leadership of the bank with Raymond Bär[16] from 1988 until 2012, last as Chairman of the board of Julius Baer Holding Ltd. Michael Bär joined the bank in 1992 and was active in various senior operating functions, last as a member of the group executive committee until 2005. As representatives of the family shareholders Mark Bär (1999–2005), Andreas Bär (2003–2005) and Beatrice Speiser-Bär (2003–2009) were members of the board of Julius Baer Holding Ltd.[17] Since its inception in 2014, the bank has been title sponsor of the FIA Formula E championship.[18] The number of personnel by full-time equivalent grew from around 400 in 1980 to more than 2'000 in the year 2000 and further to more than 6'000 in 2020 when nearly half of them were employed in Julius Baer offices abroad.[19]

Capital and scale

Julius Baer originally operated as a partnership and was incorporated on 27 November 1974 with a share capital of CHF 14.040 million, divided into 56,400 registered shares of CHF 100 each and 16,800 bearer shares of CHF 500 each. The company went public in 1980. The Baer Families relinquished control in 2005 converting the share capital into a single class of registered shares all quoted at the SIX Swiss Exchange.[20] Today, MFS Investment Management is the single biggest shareholder with nearly 10% of voting rights.[21]

In 2020, Julius Baer announced it plans to slash 300 jobs, a decision which is a part of the company's CEO's three-year plan to improve the bank's profit margins.[22]

Acquisitions

In September 2005, Julius Bär acquired the independent private banks Ferrier Lullin, Ehinger & Armand von Ernst, Banco di Lugano, and the asset management house Global Asset Management (GAM) from the Swiss banking giant UBS AG, to become one of the largest independent wealth management firms in Switzerland. UBS acquired almost 21% of Baer's shares as part of the deal,[23] but sold off its stake in May 2007 to fund a share buyback.[24] GAM was demerged as a separate company in October 2009.[25] The companies of the group are consolidated within Julius Bär Gruppe AG, whose shares are listed on the SIX Swiss Exchange.

In November 2012, Julius Baer and Milan-based Kairos Investment Management SpA (‘Kairos’) announced that they had reached an agreement for a cooperation to jointly create a leading onshore wealth management player in Italy. Julius Baer’s Italian SIM was integrated into Kairos and, simultaneously, Julius Baer acquired 19.9% of Kairos. All Italian wealth management activities of the two groups run under the name Kairos Julius Baer.[26]

Julius Baer acquired Merrill Lynch’s International Wealth Management business (IWM), based outside the US, in August 2012, for 860 million Swiss francs ($884.8 million). The deal grew Julius Baer's assets under management by 40%, raising the AuM to 251 billion francs ($258.2 billion).[27]

In July 2014, Julius Baer announced that it had purchased the private banking assets of Israeli Bank Leumi.[28]

Spin-offs and associations

GAM Holding AG

Global Asset Management (GAM) is an independent asset management business spun off from Julius Baer in September 2009 and is listed on the SIX Swiss Exchange, with a global presence, employing over 900 staff in 14 countries. Today's GAM Holding AG comprises the distinct but complementary businesses GAM and Swiss & Global Asset Management. The latter has evolved from the asset management business of Julius Baer. GAM Holding AG offers a diversified range of investment products and services to institutions, intermediaries, private clients and charities.

Julius Baer Foundation

The main focus of the Julius Baer Foundation is youth, vocational training, recycling and wealth inequality. Projects that directly benefit the younger generation are sponsored in various ways. Set up in 1965 by Walter J. Baer initially for charitable causes in Switzerland, the scope has grown together with the expansion of the business to a global scale. Julius Baer Foundation works together with and supports among others Sistema B (Chile), Solafrica (Ethiopia), Swisscontact (Switzerland) and Plastic Free Planet (UK).[29] It continues its traditional support of the Julius Baer employee-based JB Cares organisation and selected art museums in Switzerland.

In 2020, JB Cares and the JB Foundation supported aid programmes in Lebanon following the accident in the port of Beirut on 4 August 2020.[30]

Since 2019, Romeo Lacher has been the president and chairman of the Julius Baer Foundation. Andreas Weinberg serves as vice president.[31][32][33]

Controversies and lawsuits

In February 2008, Julius Baer Group sent cease and desist letters to Wikileaks and its domain registrar, resulting in subsequent legal action. The bank initially obtained a permanent injunction against the Wikileaks domain registrar on 18 February.[34] On 29 February, a federal judge dissolved the initial injunction, citing First Amendment concerns.[35] On 5 March 2008, the bank dropped the case.[36]

Alex Widmer, the chief executive of Bank Julius Baer, took his own life on 4 December 2008.[37][38] Hans de Gier, the former chief of Julius Baer Group, assumed Widmer's responsibilities for the interim.[37]

In May 2009, Boris F. J. Collardi assumed the role as CEO for the Julius Baer Group Ltd. and Bank Julius Baer & Co. Ltd.

On 17 January 2011, Rudolf Elmer provided Wikileaks with the alleged bank account details of 2,000 individuals and corporations from three financial institutions, including Julius Baer.[39] Elmer, a previous employee of Julius Baer, worked for the bank from the early 1980s until 2002 when he was dismissed for data theft.[40] In 2008, Elmer had previously leaked bank information to Wikileaks, according to the German magazine Der Spiegel, which had referred to his documents as ‘partly authentic and partly fake'.[41] It was subsequently reported that the discs had been empty, and the event a ploy to draw attention to Elmer’s court proceedings in Switzerland.[42]

In 2011, Julius Baer became one of a dozen Swiss banks to come under U.S. federal investigation for allegedly aiding US citizens in committing tax evasion.[43] The bank subsequently chose to engage with federal investigators, cooperating with the US Department of Justice investigation and accepting responsibility for its conduct.[44] On 4 February 2016, the bank signed a deferred prosecution agreement with the DOJ and agreed to pay a fine of $547 million.[45] Acting Chief Executive Bernhard Hodler reacted to the agreement in a statement saying that "This important step confirms Julius Baer's approach to cooperating constructively with competent authorities and our commitment to fulfill our regulatory obligations and responsibilities."[46]

On 20 February 2020 the Swiss Financial Market Supervisory Authority (FINMA) censured Julius Baer for falling "significantly short" in combating money laundering between 2009 and 2018 with regards to corruption allegations involving FIFA and PDVSA, Venezuela's state-owned oil and gas company. FINMA ordered Julius Baer to change its remuneration and recruitment policies, and appointed an auditor to oversee the bank to ensure its compliance with anti-money laundering standards. In March 2021, FINMA lifted the ban on large acquisitions for Julius Baer.[47] The move was driven by a report by an independent auditor that supervised the implementation of the measures that FINMA ordered.[48] Julius Baer said it welcomed the move and noted the "significant progress the bank has made in strengthening its company-wide risk management."[49]

In 2015, Julius Baer began cooperating with the US Department of Justice concerning its investigation of alleged money laundering and corruption involving officials and affiliates of the world soccer federation, FIFA.[50] Julius Baer subsequently entered into a three-year deferred prosecution agreement with the DOJ & agreed to pay fines totaling over $79 million. On May 27, 2021, Julius Baer finalized the agreement with the DOJ, resolving the investigation of the Bank’s role.[51]

See also

Notes and references

  1. ^ "Presentation of the 2020 full-year results for the Julius Baer Group". Julius Baer. Retrieved 2021-04-29.
  2. ^ "Julius Baer boosts H1 net profit by 23%". Reuters. Retrieved 2021-08-23.
  3. ^ a b "Half-year report 2021". Julius Baer. Retrieved 2021-10-14.
  4. ^ "Record-high net profit on the back of strong growth in assets under management and significant improvement in cost efficiency". Julius Baer. Retrieved 2021-10-14.
  5. ^ Jamie Crawley (2019-06-19). "The largest private banks in Switzerland". Julius Baer. Retrieved 2021-08-23.
  6. ^ "Business Review 2019". Julius Baer. Retrieved 2020-12-21.
  7. ^ "Key figures". Julius Baer. Retrieved 2021-04-29.
  8. ^ 1890-1990 Eine Familie und ihre Bank, 1990 Bank Julius Bär, Zurich
  9. ^ "Hans J. Baer, It's not all about money, Memoirs of a private banker, Beaufort Books, New York, 2008, Prominent members of the Baer Families, Biographical Sketches"
  10. ^ "Hinschied von Hans Bär". NZZ (in German). 2011-03-22. Retrieved 2019-04-29.
  11. ^ "Spätberufener Sternenforscher". ETH Zürich (in German). 2017-12-01. Retrieved 2019-04-29.
  12. ^ "Thomas Bär, Banker und Bauer". NZZ Folio (in German). 2000-05-01. Retrieved 2019-04-29.
  13. ^ "Ernst Bieri gestorben". NZZ (in German). 2003-11-22. Retrieved 2019-04-29.
  14. ^ "Case Study Julius Baer Group: Business Model Simplicity In Turbulent Times" (PDF). Universität St. Gallen. Retrieved 2021-08-17.
  15. ^ "Julius Baer bulks up in Asia with Merrill deal". Reuters. Retrieved 2021-08-17.
  16. ^ Alison Langley (2002-12-06). "Change, the New Face of Private Swiss Banking". New York Times. Retrieved 2020-11-09.
  17. ^ Offering memorandum Julius Bär, November 11, 2005
  18. ^ "Julius Baer announced as title sponsor for Zurich E-Prix". FIA Formula E. 2018-01-05. Retrieved 2019-05-28.
  19. ^ "History of Julius Baer" (PDF). Retrieved 2021-09-08.
  20. ^ "Family Owners of Julius Baer, A Swiss Bank, Cede Control". www.nytimes.com. 2005-01-17. Retrieved 2020-12-21.
  21. ^ "Significant Shareholders". Julius Baer Group. Retrieved 2020-12-21.
  22. ^ Gonçalves, Pedro (2020-02-04). "Julius Baer to slash 300 jobs and close Bahamas office". www.internationalinvestment.net. Retrieved 2020-03-16.
  23. ^ Wright, Tom (6 September 2005). "Julius Baer buys units form UBS". The New York Times. Retrieved 2020-12-21.
  24. ^ "Today In Business: UBS Sells Julius Baer Stake". The New York Times. 26 May 2007. Retrieved 2009-02-22.
  25. ^ de Sa'Pinto, Martin (1 October 2009). "Julius Baer splits operations, unlocks value". Reuters. Retrieved 2010-03-26.
  26. ^ Larsen, Ross (2015-11-16). "Julius Baer Agrees to Raise Stake in Italy's Kairos to 80%". Bloomberg.com. Retrieved 2018-08-01.
  27. ^ Schaefer, Steve. "Julius Baer Picks Up Merrill Unit From BofA". Forbes. Retrieved 2018-07-30.
  28. ^ Shotter, James (2014-07-21). "Julius Baer in deal to acquire Israeli lender Leumi's assets". Financial Times. Retrieved 2020-12-21.
  29. ^ "Julius Baer Foundation Annual Report 2018". Julius Baer. Retrieved 2020-01-31.
  30. ^ "Fund raising for Lebanon: Julius Baer Cares and Julius Baer Foundation support emergency relief efforts". Word Press. 23 September 2020. Retrieved 2 March 2021.
  31. ^ "Julius Baer chairman to step down". Private Banker International. 14 January 2019. Retrieved 1 March 2021.
  32. ^ "Julius Baer Chairman to Exit". Finews. 14 January 2019. Retrieved 1 March 2021.
  33. ^ "Our Organisation". Julius Baer. Retrieved 1 March 2021.
  34. ^ "Whistle-blower site taken offline". BBC. Retrieved 23 September 2021.
  35. ^ Gollner, Philipp. "Judge reverses ruling in Julius Baer leak case". Reuters. Retrieved 23 September 2021.
  36. ^ "Swiss bank abandons lawsuit against Wikileaks website". The Sydney Morning Herald. Retrieved 23 September 2021.
  37. ^ a b Reid, Katie (5 December 2008). "Bank Julius Baer CEO dies unexpectedly". Reuters.
  38. ^ Ralph Atkins (1 June 2016). "Suicide highlights Swiss executive stress". Swissinfo.ch.
  39. ^ Eckert, Dirk. "Schweizer übergibt Bankdaten an Wikileaks". Deutsch Welle. Retrieved 15 August 2021.
  40. ^ "Brisante Bekenntnisse eines Bank-Insiders". Der Spiegel. Retrieved 15 August 2021.
  41. ^ Stark, Holger; Balzli, Beat. "Karibisches Leck". Der Spiegel. Retrieved 15 August 2021.
  42. ^ "Elmers CDs entpuppen sich als Reinfall". Tages-Anzeiger. Retrieved 15 August 2021.
  43. ^ Letzing, John. "Julius Baer Has Agreement in Principle in U.S. Tax Probe". The Wall Street Journal. Retrieved 5 August 2021.
  44. ^ "Julius Baer signs final deal with the US". SwissInfo. Retrieved 5 August 2021.
  45. ^ "Criminal Charges Filed Against Bank Julius Baer of Switzerland with Deferred Prosecution Agreement Requiring Payment of $547 Million, as Well as Guilty Pleas of Two Julius Baer Bankers". The United States Department of Justice.
  46. ^ Gonçalves, Pedro. "Julius Baer pays $547m to settle tax evasion case in US". International Investment. Retrieved 5 August 2021.
  47. ^ Arons, Steven (31 March 2021). "Swiss Regulator Lifts Ban on Large Scale M&A for Julius Baer". Bloomberg. Retrieved 30 April 2021.
  48. ^ Tokar, Dylan; Kirby, Joshua (31 March 2021). "Swiss Regulator Lifts FIFA-Related Acquisition Ban on Julius Baer". The Wall Street Journal. Retrieved 30 April 2021.
  49. ^ Arons, Steven (31 March 2021). "Swiss Regulator Lifts Ban on Large Scale M&A for Julius Baer". Bloomberg. Retrieved 30 April 2021. Julius Baer welcomes the lifting of the ban on complex acquisitions given the significant progress the bank has made in strengthening its company-wide risk management, particularly with regard to money laundering prevention,” it said in the statement
  50. ^ Walker, Owen. "Julius Baer earmarks $80m to settle Fifa corruption case". Financial Times. Retrieved 17 October 2021.
  51. ^ "Bank Julius Baer Agrees to Pay More than $79 Million for Laundering Money in FIFA Scandal". www.justice.gov. 2021-05-27. Retrieved 2021-10-02.