February 3, 2020 / 6:32 AM / a month ago

Julius Baer to cut 300 jobs after 2019 profit drop

CEO Philipp Rickenbacher of Swiss bank Julius Baer addresses the annual news conference to present the results for 2019 in Zurich, Switzerland February 3, 2020. REUTERS/Arnd Wiegmann

ZURICH (Reuters) - Julius Baer (BAER.S) will cut 300 jobs this year, its chief executive said on Monday, as the Swiss wealth manager looks to boost profitability after a double-digit percentage earnings fall during 2019.

The private bank wants to boost profitability with a new three-year strategy to deal with continued margin pressures, Chief Executive Philipp Rickenbacher told journalists on a call.

The Zurich-based lender aims to improve its adjusted cost-income ratio to 67% by 2022, better than its previous 68% target and the 71% level achieved in 2019, by cutting costs by 200 million Swiss francs ($206.72 million) and growing income.

“We will accelerate our investments in human advice and technology,” Rickenbacher said. “And we will shift our leadership focus from an asset-gathering strategy to one of sustainable profit growth.”

Since becoming CEO in September, Rickenbacher has reduced the size of the Baer’s executive board to boost efficiency and client focus, particularly on ultra-wealthy clientele.

Baer said on Monday it expected to improve revenues by more than 150 million Swiss francs over the three-year period by broadening its offerings for wealthy and ultra-wealthy clients and increasing technology investments to enhance its client advice.

On an unadjusted basis, net profit attributable to shareholders fell 37% to 465 million Swiss francs in 2019, after a 250 million franc impact from legal provisions and a goodwill impairment on its underperforming Italian asset manager Kairos hit earnings.

Shares were seen 1.75% lower in pre-market indications.

Reporting by Brenna Hughes Neghaiwi, editing by John Revill

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