Julius Baer Earnings: Full Provisions Limit Credit Risk, but Reputational Damage Remains

Wide-moat Julius Baer reported its worst half-year results in over a decade as the fallout from its exposure to embattled property group Signa forced it into a loss-making position for the second half of 2023. However, we applaud the decisive steps that Julius Baer has taken to address the issue. It announced a full impairment of its remaining total exposure to Signa of CHF 606 million and intends to completely exit the so-called private debt lending business of which the Signa exposure forms part. Julius Baer also confirmed that CEO Philipp Rickenbacher will step down. We took heart from the solid underlying performance and Julius Baer's unchanged medium-term guidance.