Banking Crisis

Julius Baer Says Russia Exposure "Not Significant"

Tom Burroughes, Group Editor, 22 March 2022

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The Swiss bank joins rivals such as UBS and Credit Suisse, as well as a number of other groups, in detailing its exposures to Russia.

Julius Baer has become the latest bank to outline potential exposures to Russia, stating yesterday that its business with the country and associated clients is negligible.

The Zurich-listed private bank, which doesn’t have an investment banking arm, issued its Russia exposures on the same day that it issued its annual report to shareholders.

“The collateral value of Russian assets, including those traded on markets outside Russia, was reduced to zero in February 2022. Julius Baer has worked closely with the affected clients to adjust the credit positions accordingly, without this leading to any credit losses to date,” the bank said in a statement.

“The group has credit exposure to a low-single-digit number of clients subject to the recently introduced sanctions. The exposure is in the form of mortgage loans at conservative lending values against residential properties in prime locations in Western Europe, as well as a marginal Lombard credit exposure fully covered by pledged liquid assets collateral,” it continued. 

A raft of banks, including fellow Swiss banks UBS and Credit Suisse, have set out their Russia exposures.

“Julius Baer’s market risk exposure to Russia is not significant and is tightly managed. The group is further monitoring settlement risks related to certain open transactions with Russian financial institutions related to Russian securities, such as market closures, the imposition of exchange controls, sanctions or other measures which may potentially delay or impair the counterparties’ ability to honour such claims,” it said. The net asset value of the advisory subsidiary Julius Baer CIS Ltd in Moscow amounted to SFr400,000 as at 31 December 2021. The group is reducing its local activities in line with contractual agreements, while ensuring the safety of its small number of employees,” it said.

Julius Baer said it is donating SFr2 million ($2.14 million) to support the activities of the Swiss Red Cross in Moldova and Poland and the Swiss Refugee Council. Its employee organisation ‘JB Cares Switzerland’ collected funds from staff that, after being matched by the Julius Baer Foundation, resulted in an additional donation of SFr450,000 to the Swiss Red Cross.

“I believe I speak for all my colleagues at Julius Baer when I express my sadness and concern for those affected by this deplorable act of aggression. This feeling is mirrored in the generous contributions by our employees to a recent fundraising initiative in support of the relief efforts for the most vulnerable civilians in this war. Besides contributing financially to humanitarian help, Julius Baer is fully focused on managing all risks for the group and its clients with the utmost discipline,” the bank’s chief executive, Philipp Rickenbacher said. 

This publication recently commented on how banks, law firms and other organisations should address Russian clients.

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