Stefan Bollinger knows how to work his way up from the bottom — literally. As a teenage apprentice in Switzerland he started out in subterranean bank vaults and was repeatedly told that with no university degree, his banking career was over.
Three decades later, the former Goldman Sachs banker has landed one of the top jobs in Swiss finance: chief executive of the country’s second-largest listed wealth manager, Julius Baer.
But far from an easy homecoming for a novice chief executive, Bollinger’s first six months have been marred by risk management revelations that threaten to undermine his effort to move the bank on from the Signa property loan scandal that ousted his predecessor.
Ahead of a set-piece strategy event for the Zurich-based bank earlier this month, Bollinger had to contend with reports of long-standing regulatory concerns about anti-money laundering controls, SFr130mn of fresh loan losses, and the departure of its chief risk officer. Julius Baer’s shares have shed 11 per cent since January, even as the rest of the European banking sector has gained just shy of 30 per cent.
“With the fall of Credit Suisse, Julius Baer is more in the spotlight. It is more important than ever for it to show its business model works for the sake of the entire Zurich financial system. If [Bollinger] fails, I think it is a signal it cannot,” said Tobias Straumann, a Swiss historian specialising in the financial sector.
Julius Baer’s business model differs from that of Geneva-based private banks like Lombard Odier and Pictet, which are owned by partners and typically extremely risk averse.
It has by comparison been more aggressive in its pursuit of growth, particularly as wealth management margins have come under pressure.
That took Julius Baer into areas such as private debt, where it lent to ultra-rich clients who wanted to borrow money for their businesses — and to René Benko, whose collapsed Signa property group would end up costing the bank SFr606mn in writedown last year and result in chief executive Philipp Rickenbacher losing his job.
Efforts to reshape the group had started before Bollinger joined, with the bank winding down its private debt loan book. Its private debt exposure is now well below SFr200mn — a more than 50 per cent reduction since the end of 2024 — and the bank is undertaking an extended review of the remainder of the credit portfolio.
Still, the bulk of the turnaround will fall to Bollinger and former HSBC chief Noel Quinn, who started as chair of the Swiss bank last month.
Neither Bollinger nor Quinn has the sort of traditional Swiss banking pedigree that is customary among the country’s senior financiers, however. Bollinger spent 25 years outside Switzerland, working in London — first at JPMorgan Chase and then jumping ship to Goldman.
There is optimism that Bollinger’s outsider status could help him shake up Julius Baer, even if he is Swiss.
“He is not part of the ‘Zürcher Filz’,” said one person from a rival Swiss private bank, referring to Zurich’s old, largely male, financial establishment.
“He doesn’t have to stay in or be part of that circle. He can be aggressive and cut jobs and not be so worried. I think he has a good shot.”
But when Bollinger set out his strategic vision for the wealth manager earlier this month, he received a somewhat muted reception.
He outlined a shift in focus towards wealth management, an extra SFr130mn in cost savings to be achieved by 2028, and diluted targets for the bank’s cost-to-income ratio. Savings will come from job cuts, reductions in the use of consultants and IT simplifications.
Analysts at KBW called it “underwhelming”; UBS said it was a “good start” but downgraded the bank citing an “uncertain, likely long, journey to re-rating”.
Others were more sympathetic. Citi’s analysts moderated their view after hearing from management. Having been “initially disappointed”, they later declared they were “reassured by new leadership’s refocusing and returning of the business to its core proposition to restore sustainable and profitable growth”.
One person familiar with conversations with investors in the wake of the strategy day said that they were happy with “realistic” targets.
“Basically analysts felt it was not aggressive enough. But as Stefan said on the day, he wants to break with that tradition of overpromising and underdelivering,” said one senior person at Julius Baer familiar with the discussions. “I think it took a few days to understand that.”
He has embarked on a whirlwind tour to win over clients, making it a personal mission to meet 1,000 of them in his first year. So far he had met nearly 500, one person familiar with the effort said.
“He dramatically grew the business at Goldman [Sachs] and was generally well liked,” said one former colleague. “He is not afraid to get his hands dirty and get out of his office.”
That has yet to show up in the wealth manager’s results. Julius Baer reported net new money inflows — a key metric for wealth managers — of SFr4.2bn during the first four months of the year, at a time when peers’ performance has been far stronger.
It is culture — not clients and growth — that could be Bollinger’s greatest challenge, however.
A Finma enforcement decision document from November seen by the Financial Times described a “weak and inadequate compliance and risk culture on the first and second lines of defence” going back more than a decade.
Bollinger insisted at the strategy day that risk management was “in his DNA”. He has changed compensation rules and reorganised business lines to put employees previously in management more on the front line of defence and increase the accountability of relationship managers.
One person familiar with Bollinger’s approach said that the changes needed were not difficult but would take time to materialise.
“All of these relationships are getting reviewed and a better risk management approach is being put in place. That will take time but it is not a hard fix,” they said.
But with risk management shortcomings at the heart of many of the wealth manager’s recent setbacks, some analysts said the level of detail provided by Bollinger fell short.
“In terms of risk and compliance, this is a sensitive topic. We did not really get new information there,” said Andreas Venditti at Vontobel.
Whether Bollinger can pull off the risk management reforms will depend on whether he can persuade his new Swiss colleagues that it is worth sticking with the wealth manager through a period of cutbacks and intense regulatory scrutiny.
“Everything rises and falls on leadership. He needs to bring employees with him on what is going to be at times a painful journey,” said one Zurich-based manager for the bank.
“At the moment it still feels unclear if he can come back into the trenches with us or try to make the changes just from the top.”
Additional reporting by Simon Foy and Cynthia O’Murchu in London
