Julius Baer shares surge to 52-week high after FINMA closes enforcement case

Investing.com -- Julius Baer Gruppe AG (SIX:BAER) shares surged to a 52-week high on Tuesday after Swiss regulator FINMA concluded a long-running enforcement procedure covering legacy risk-management and anti-money-laundering issues.

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Julius Baer shares rose 7.18% to CHF76.74, significantly outperforming the broader Swiss market, with the SMI little changed in Tuesday trading. The stock traded close to its 52-week high of CHF77.26.

FINMA said Julius Baer committed serious breaches of supervisory requirements related to risk management and anti-money-laundering obligations. The investigation covered a major private-debt credit event and relationships with two Russian politically exposed persons.

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The enforcement action centered partly on loans to a European group and its founder that eventually exceeded CHF1 billion. FINMA said the bank ignored warning signs and breached internal and regulatory risk limits, with an outstanding exposure of CHF586 million ultimately written down in full by the end of 2023. It also found deficiencies in the scrutiny of the source of assets connected to two high-risk Russian PEPs.

As part of the conclusion of the case, Julius Baer will be required to hold CHF250 million of additional CET1 capital, down from the previous CHF500 million requirement. The resulting de facto minimum CET1 ratio is 9.4%, while Julius Baer's reported CET1 ratio stood at 18.5% at the end of June.

The bank said the matters occurred before the appointment of its current management team and that it had already implemented remedial measures, including a revamped risk and compliance framework and changes to governance. It also said the wind-down of its private-debt business formed part of those measures.

Julius Baer said it remains focused on its 2026-2028 strategic cycle and its medium-term financial targets. The bank has also submitted a request to FINMA for approval to restart its share-buyback programme, pending final approval.

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Julius Baer shares surge to 52-week high after FINMA closes enforcement case

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