Swiss Regulator Finma Ends Proceeding Against Julius Baer

(Bloomberg) — Julius Baer Group Ltd. said it applied for permission to resume share buybacks after Swiss regulator Finma concluded its enforcement procedure against the bank, marking the end of a painful restructuring.

“Today we’ve reached an important milestone, which is a recognition of our efforts over the past 20 months,” Chief Executive Officer Stefan Bollinger said in a statement Tuesday.

The end of the proceedings removes a long-standing overhang for the Swiss wealth manager, which came under regulatory scrutiny following steep losses from Baer’s dealings with Austrian property tycoon Rene Benko. Bollinger, who took over as part of the shakeup, has had to contend with multiple setbacks as his clean-up ground on and weighed on staff morale.

Finma, in a separate statement Tuesday, said it established “serious violations of supervisory provisions” and is confiscating profits of around 10 million Swiss francs ($12 million) that Baer earned in relation to two politically exposed client groups.

Julius Baer is also required to seek approval for any payments such as dividends. A temporary ban on entering into new business relationships with politically exposed clients from high-risk countries will be phased out gradually.

Still, the end of the proceedings is a positive for the firm, which noted that additional capital requirements imposed by Finma were halved to 250 million francs, from 500 million francs previously. They will be in place until Baer has concluded the “divestment of client assets that no longer correspond to the firm’s risk appetite,” Finma wrote.

(Adds Finma statement from fourth paragraph.)

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