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Julius Baer’s chief executive and a board member responsible for risk are leaving the Swiss bank as it prepares to write off SFr606mn ($700mn) on loans to crisis-hit Austrian property group Signa, according to people familiar with the board’s decision.
Philipp Rickenbacher would be replaced as chief executive by Nic Dreckmann, his deputy, and the bank would exit its private debt business, which was the source of the lending to Signa, the people said. Staff who were connected to the business with Signa would receive no bonus for 2023, they added.
The bank’s board met on Wednesday to thrash out plans for emerging from the biggest crisis to hit the wealth manager for five years.
Julius Baer is one of the biggest lenders to Signa, a European luxury developer whose assets include a stake in KaDeWe, Germany’s most famous department store, and the Chrysler Building in New York.
The bank will publish its full-year results on Thursday morning, when the changes are set to be announced.
Julius Baer is also considering legal action to recoup money from Signa, the group run by René Benko that is facing insolvency proceedings. The bank has decided to write off its total SFr606mn exposure to Signa, rather than the SFr400mn that analysts had expected.
Evie Kostakis, the bank’s chief financial officer, and chief risk officer Oliver Bartholet are expected to stay on.
Rickenbacher’s departure was reported earlier by Bloomberg.
A former McKinsey consultant, Rickenbacher became CEO of Julius Baer in 2019 after a series of international money-laundering scandals led to the departure of his predecessor, Boris Collardi.
Rickenbacher was drafted in to bring stability to the group, following regulatory probes into the bank’s dealings with Fifa, world football’s governing body, and a separate alleged case of corruption involving Petróleos de Venezuela, a state-owned oil and natural gas group.
But Julius Baer’s exposure to Signa raised questions about whether he could survive the fallout.
Shares in the Swiss bank have dropped 15 per cent since it first revealed its exposure in November, when it said it would review its private debt business.
At the time, Julius Baer said its total private debt loan book amounted to SFr1.5bn, including 21 other counterparties.
David Nicol, a Julius Baer board member who also led its governance and risk committee, is also set to leave, according to people briefed on the decisions. Richard Campbell-Breeden, another director, is expected to be named vice-chair of the board and support chair Romeo Lacher.
The board has brought in a third party to review the bank’s corporate governance, according to people with knowledge of the matter. Swiss financial regulator Finma, which has been investigating Julius Baer’s exposure to Signa, is also stepping up its probe.
Julius Baer declined to comment.