Bad buy, in Italy cost Julius Baer nearly 100 million Swiss francs

At the beginning of the Management practiced in optimism: "We are convinced that we can benefit from our ambitious plans in the Italian Private Banking sector of Kairos' Expertise and Reputation," said the former Bank chief Boris Collardi in December 2012. At that time, , Julius Baer the entry in the Italian asset Manager Kairos.

Today is Tuesday presented To his successor, Philipp Rickenbacher, the shareholders, the receipt for the broken growth dreams: Almost 100 million francs, Julius Baer writes on the value of Kairos.

It is a new copyist

And this must not be the last word threatens. Because Kairos has lost within a year, nearly 30 percent of customer deposits. At the end of October, the Italian subsidiary managed 8.4 billion Swiss francs. It has reached to the level of the end of 2015.

Should the cash outflows cannot be stopped, it could be a new copyist due. Even after the impairment bear still has 217 million Swiss francs of so-called Goodwill in the balance sheet, i.e. intangible assets that must be depreciated, should keep the growth up. Total paid bear in several steps 480 million Swiss francs for Kairos.

An expensive Flop

The Takeover, emerges now as an expensive Flop, of the spoiled the new bear chief Philipp Rickenbacher its Start. Rickenbacher had taken over at the beginning of September, the leadership of the private Bank. Barely in office, he is not required to record a Value adjustment on Kairos. The outflows in the Italian problem daughter also, that the new Bank chief has to take back the growth target for this year.

Because of the outflows in the case of Kairos, the new money growth in the overall group declined in the first ten months to a mere 3 percent. Julius Baer wants to achieve full-year growth of 4 to 6 percent. "It is unlikely that the group achieved this year, their medium-term objective," writes the Bank in the media release.

Management carries part of the responsibility

the Malaise in Cairo, the bear-management is partly to blame. For months, the problem daughter is officially back up for sale. "This created uncertainty, which is why it is the disposal of assets to Staff and to large outflows came," says Andreas Venditti, a Bank analyst at Bank Vontobel.

"In retrospect it was the Kairos-buying is not a good idea."Andreas Venditti, a Bank analyst at Vontobel

in August, the bear-management decided to keep the Italian subsidiary, then. Apparently, they wanted to buy no one. A new Management and closer cooperation with the mother house are now to turn things around. The trigger for the problems in Cairo was, however, that the Fund of the Julius Baer daughter suffered in the last year, a very poor performance. Just professional investors returned to Cairo, then disappointed the back.

share buy-back lifts mood

in Order to keep the shareholders of Julius Baer, in spite of the problems in Italy in a good mood, the Bank began a stock repurchase program to a total value of 400 million francs. That came on the stock well.

"In retrospect, it was the Kairos-buying is not a good idea," says Analyst Venditti. "Kairos cared for primarily institutional clients and less wealthy private customers, which doesn't really fit with the strategy of Julius Baer. Kairos has become so small that the daughter of the group has a total potential only limited damage."

Created: 19.11.2019, 16:44 PM