Doom and gloom was pronounced on Swiss banks in the wake of the Swiss central bank’s removal of the cap on the nation’s currency, but private Zurich-based Julius Baer is showing resilience with a 6.4% jump in its stock price after management announced a cost-saving program, according to Reuters.
CNBC noted that the Swiss bank has “reacted swiftly” to threats of currency appreciation with a savings plan of around 100 million Swiss francs or $108 million. The Swiss franc has reacted swiftly as well, rising 12% against the euro since the cap was lifted; whether stronger Swiss banks like Julius Baer can outrun the euro is a contest worth watching. While net profit rose 22%, it was below target, and management said there will be reductions in staff as well as fewer perks for those left working at the bank. Julius Baer is cutting over 200 hundred jobs, a number the Wall Street Journal considers “relatively small” given its 5, 247 employees, 3, 000 Swiss-based.
Julius Baer is also facing a U.S. probe that it allegedly helped wealthy clients evade taxes in offshore accounts. According to Reuters, CEO Boris Collardi said, “We still don’t have any news for you on this topic, but I am confident that this is now, once and for all, a 2015 topic.”
Former Prime Minister Ehud Barak has worked for the Julius Baer Group, which has an exclusive clientele of heirs, entrepreneurs, politicians and celebrities. The bank was started by the Baer family who were targeted as Jews in Europe and escaped the Holocaust to settle in America. The Baer family has been helping Jews in their lawsuits against Swiss banks who hid assets stolen from Jews by the Nazis. The Baer family also is the leader of Keren Hayesod Switzerland and has donated millions to Jewish causes. Ehud Barak serves as special adviser to the management of the bank and its global CEO, Boris Collardi, in geopolitical issues and economics.