By CARLO BOFFA, EU Correspondent
SWISS financial watchdog FINMA fined Julius Baer CHF10 million and restricted new business relationships over serious breaches of risk management and anti-money laundering obligations.
FINMA said on Tuesday it had concluded enforcement proceedings against the bank over private loans to a European group and business ties with two Russian politically exposed persons (PEPs). It was the fifth enforcement case involving the lender in 10 years.
From September 2019, the bank granted loans to the group and its founder through its new private debt business, with exposure eventually exceeding CHF1 billion, FINMA said. It added that the bank had failed to critically review negative media reports and suspicious client behaviour with sufficient rigour in the two Russian cases.
FINMA ordered the bank to submit regular compliance reports on its risk and compliance culture and the steps it has taken to improve it. A 2025 ban on entering business relationships with PEPs from high-risk countries will be phased out only gradually.
Remedial measures
Julius Baer said it had since adopted “comprehensive remedial measures”.
The failings took place under former CEO Philipp Rickenbacher, who resigned in February 2024 after the bank reported massive losses tied to the failed property company Sigma.
The bank has also wound down its private debt business and revised its risk and compliance framework.
“These significant changes have made Julius Baer the simpler and stronger organisation it is today, with a solid foundation and a clear strategic direction,” said CEO Stefan Bollinger.
Given the changed risk situation and those measures, the regulator lifted, in part or in full, the immediate capital and liquidity measures it had previously imposed.
However, it told the bank to keep a CHF250 million capital add-on until it completes the divestment of client assets that no longer fit its risk appetite.
Julius Baer said that following the end of the proceedings it has submitted to FINMAa request to restart its share buy-back program.
The fine was the second high-profile penalty for the Swiss lender this month, after its Monaco wealth management arm was fined €1.5 million for serious money laundering breaches.
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