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(Sharecast News) - Julius Baer booked a further CHF 149m (140.98m) loan-loss provision tied to its real estate lending on Monday, concluding a credit review aimed at resolving legacy credit problems that had weighed on the Swiss wealth manager for more than two years.
The additional charge, linked primarily to income-producing residential and commercial property exposures, added fresh pressure to the bank's turnaround plan and would push 2025 net profit below last year's level.
It said the review, launched in May after a series of heavy losses, led it to identify around CHF 700m of loan book positions it would now manage down because they no longer fit its strategy.
Julius Baer had already booked a CHF 130m provision earlier this year and wrote off its full CHF 606m exposure to collapsed Austrian property group Signa in 2023, prompting a management overhaul, regulatory scrutiny and the closure of its private-debt business.
Switzerland's financial regulator FINMA was continuing to pursue enforcement proceedings related to the Signa case.
Chief executive Stefan Bollinger said the completion of the review marked a "final phase" in addressing legacy issues and that the group was now better aligned around its core wealth-management focus, supported by a revised risk appetite and strengthened risk controls.
Still, he told investors the bank was "not quite there yet" on resuming share buybacks, with discussions unable to begin before late February, when Victoria McLean - hired from Goldman Sachs as chief compliance officer - formally joined.
Despite the latest provision, Julius Baer reported record assets under management of CHF 520bn at the end of October, up 4% since January, driven by CHF 11.7bn in net new money and rising markets.
The increase offset currency headwinds and the sale of its Brazilian unit.
Its adjusted cost-income ratio improved to 66%, while management flagged upcoming investment to modernise its Swiss core banking infrastructure.
At 1021 CET (0921 GMT), shares in Julius Baer Gruppe were down 5.09% at CHF 55.52.
Reporting by Josh White for Sharecast.com.