Julius Baer's new goals fail to impress in setback for CEO
[ZURICH] Julius Baer Group unveiled fresh targets aimed at cutting costs and setting the Swiss wealth manager on the road to better profitability, though investors saw little reason to cheer.
Shares in the Zurich-based lender fell after the open on Tuesday (Jun 3), following chief executive officer Stefan Bollinger's announcement of an extra 130 million Swiss francs (S$205 million) in cost cuts through 2028. The bank set a weaker efficiency target, and gave little detail on growth measures.
Bollinger and new chairman Noel Quinn are seeking to put the bank on a path for growth after a string of missteps including the 2023 losses linked to the Signa real estate collapse. Yet both of Bollinger's strategy announcements since taking over in January have left investors looking for more.
Baer shares were down 1.5 per cent at 9.47 am in Zurich.
The firm scrapped medium-term targets for profitability, and instead introduced a goal for net new money, a key metric for wealth managers. The bank aims to improve the measure by 4 to 5 per cent over the next three years.
'Baer has reported an underwhelming strategy update as net new money and cost income ratio targets fail to excite relative to expectations,' analysts including Tom Hallett at KBW wrote in a note.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
On growth, the bank said it intends to 'sharpen segmentation and coverage, enhance its product offering, strengthen top positions in core geographies, and increase productivity.'
Buybacks frozen
In May the bank booked another large loss from property developments it helped finance. The 130 million Swiss francs loan-loss charge related to its private debt business and selected positions in its mortgage operation.
In the same month Julius Baer disclosed that regulators had ordered it to hand over 4.4 million Swiss francs because of alleged failings in money-laundering controls related to transactions that had occurred between 2009 and 2019.
Baer confirmed that a share buyback programme is on hold until it has clarity over the outcome of an investigation into the Benko losses by the regulator Finma has concluded.
Anke Reingen, an analyst at RBC Capital Markets, said that the target updates 'make sense' but that investors would need to see 'evidence of a better outcome and buybacks to resume to see earnings growth and upgrades coming through.' BLOOMBERG
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
31 minutes ago
- Straits Times
Asus fends off bid to ban US laptop imports in Lenovo patent dispute
Lenovo has accused Asus' computers of infringing patents related to wireless communications, diagonal touchpad scrolling and other technology. PHOTO: UNSPLASH Asus fends off bid to ban US laptop imports in Lenovo patent dispute WASHINGTON - Taiwanese electronics maker Asus on June 20 defeated rival Lenovo's bid to block American imports of Asus' Zenbook laptops and other computers as part of a patent dispute between the two companies. The ruling by the US International Trade Commission was a defeat for Hong Kong-based Lenovo in a patent fight with Asus that extends to California federal court and Europe's Unified Patent Court. Lenovo has accused Asus' computers of infringing patents related to wireless communications, diagonal touchpad scrolling and other technology. The commission's order on June 20, which upheld an ITC judge's preliminary decision from February, can be appealed to the Washington-based US Court of Appeals for the Federal Circuit. Spokespeople for Lenovo and Asus did not immediately respond to requests for comment on the decision. Lenovo, the world's largest PC maker, sued Asus in San Jose, California, and at the ITC in 2023, alleging that technology in Asus' Zenbook Pro and Zenbook Flip 14 laptops infringed a variety of its patents. Lenovo asked the California court for an unspecified amount of monetary damages, including lost profits and royalties, and an order permanently blocking the alleged infringement. The California lawsuit was paused during the ITC proceedings. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
AsiaOne
3 hours ago
- AsiaOne
Australia social media teen ban software trial organisers say the tech works, World News
SYDNEY - Some age-checking applications collect too much data and no product works 100 per cent of the time, but using software to enforce a teenage social media ban can work in Australia, the head of the world's biggest trial of the technology said on Friday (June 20). The view from the government-commissioned Age Assurance Technology Trial of more than 1,000 Australian school students and hundreds of adults is a boost to the country's plan to keep under 16s off social media. From December, in a world first ban, companies like Facebook and Instagram owner Meta, Snapchat and TikTok must prove they are taking reasonable steps to block young people from their platforms or face a fine of up to A$49.5 million (S$41 million). Since the Australian government announced the legislation last year, child protection advocates, tech industry groups and children themselves have questioned whether the ban can be enforced due to workarounds like Virtual Private Networks, which obscure an internet user's location. "Age assurance can be done in Australia privately, efficiently and effectively," said Tony Allen, CEO of the Age Check Certification Scheme, the UK-based organisation overseeing the Australian trial. The trial found "no significant tech barriers" to rolling out a software-based scheme in Australia, although there was "no one-size-fits-all solution, and no solution that worked perfectly in all deployments," Allen added in an online presentation. Allen noted that some age-assurance software firms "don't really know at this stage what data they may need to be able to support law enforcement and regulators in the future. "There's a risk there that they could be inadvertently over-collecting information that wouldn't be used or needed." Organisers of the trial, which concluded earlier this month, gave no data findings and offered only a broad overview which did not name individual products. They will deliver a report to the government next month which officials have said will inform an industry consultation ahead of the December deadline. A spokesperson for the office of the eSafety Commissioner, which will advise the government on how to implement the ban, said the preliminary findings were a "useful indication of the likely outcomes from the trial. [[nid:705771]] "We are pleased to see the trial suggests that age assurance technologies, when deployed the right way and likely in conjunction with other techniques and methods, can be private, robust and effective," the spokesperson said. The Australian ban is being watched closely around the world with several governments exploring ways to limit children's exposure to social media.
Business Times
4 hours ago
- Business Times
Walmart to pay US$10 million to settle US FTC lawsuit over money transfer fraud
[NEW YORK] Walmart has agreed to pay US$10 million to settle a US Federal Trade Commission (FTC) civil lawsuit accusing the world's largest retailer of ignoring warning signs that fraudsters used its money transfer services to fleece consumers out of hundreds of millions of US dollars. The settlement was filed on Friday (Jun 20) in Chicago federal court, and requires approval by US District judge Manish Shah. Walmart also agreed not to process money transfers it suspects are fraudulent, or help sellers and telemarketers it believes are using its services to commit fraud. 'Electronic money transfers are one of the most common ways that scammers tell consumers to send them money, because once it's sent, it's gone for good,' said Christopher Mufarrige, director of the FTC's consumer protection bureau. 'Companies that provide these services must train their employees to comply with the law and work to protect consumers.' The Bentonville, Arkansas-based retailer did not admit or deny wrongdoing in agreeing to settle. Walmart said that it was pleased to settle and shared the FTC's goal of protecting consumers from fraudsters, including from fraud-induced money transfers. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up In its June 2022 complaint, the FTC accused Walmart of turning a blind eye to fraudsters who used its money transfer services to cash out at its stores. Walmart acts as an agent for money transfers by companies such as MoneyGram, Ria and Western Union. Money can be hard to trace once delivered. The FTC said fraudsters used many schemes that included impersonating Internal Revenue Service agents, impersonating family members who needed money from grandparents to avoid jail, and telling victims they won lotteries or sweepstakes but owed fees to collect their winnings. Shah dismissed part of the FTC case last July but let the regulator pursue the remainder. Walmart appealed from that decision. Friday's settlement would end the appeal. REUTERS
