Julius Baer Board Quizzes CEO Bollinger Over Low Staff Morale
(Bloomberg) — Julius Baer Group Ltd. Chief Executive Officer Stefan Bollinger was questioned by the bank’s board of directors over negative feedback in an internal employee survey, underlining the headwinds he’s facing in his bid to turn the lender around.
The governance body led by Chairman Noel Quinn asked Bollinger in a meeting last month to discuss the reasons for the low morale expressed in the latest installment of a staff poll, people familiar with the matter said. The board also asked Bollinger to explain what he’s planning to do to make sure the metrics improve, the people said. The people asked not to be named discussing the private matter.
The board wasn’t surprised that morale has dropped given Bollinger’s cost savings program, which includes substantial job cuts, one of the people said. But it’s the latest in a series of headaches for Bollinger as he tries to lower expenses and boost revenue amid a two-year period of turmoil at the bank. He took over as CEO in January this year after losses linked to the Benko real estate bankruptcy in 2023 cut profit in half and led to the departure of earlier boss Philipp Rickenbacher.
“The board is fully endorsing and supporting our strategy and the swift action we took addressing legacy issues, including restoring positive operating leverage,” a spokesperson for the bank said in response to questions. “Julius Baer remains fully committed to be the employer of choice in wealth management.”
The employee survey results deteriorated particularly in March and remained low through the summer, one of the people said. The bank announced several hundred job cuts and a dramatic downsizing of the executive board at the beginning of February, at the same time as Swiss regulator Finma said it was opening a formal investigation into the Benko matter at the bank.
The Finma investigation is ongoing, with no clear timetable for conclusion. Bollinger said during an investor update this week it remains unclear when the bank might be able to resume shareholder payouts. The bank’s share price has fallen slightly this year while an index of European peers has risen more than 50%.
Noel Quinn, the previous CEO of HSBC Holdings Plc, was named as chairman in February and took over the job in May.
Bollinger has also appointed several senior executives in a bid to revamp the firm’s risk culture while cutting costs. Multiple market and business heads have also been changed since he began. The firm is exiting the private debt business at the heart of the Benko losses, and has announced write-downs and higher provisions on various real estate loans totaling 280 million Swiss francs ($348 million).
On his first day at Julius Baer, Bollinger told staff that they shouldn’t be afraid to speak up and reach out to him if there was anything that needed changing. He received more than 1,000 emails, people familiar with the matter said previously.
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