Julius Baer plans to cull 300 jobs globally this year, around 4% of its workforce, following a 37% year-on-year fall in net 2019 profits that has helped to trigger a cost-cutting drive by new CEO Philipp Rickenbacher. But staff in Singapore and Hong Kong, where Julius Baer has been expanding aggressively in recent years, will escape the worst of the redundancies. As many as 200 of the layoffs, which affect front-to-back office functions, will be in Julius Baer’s home market of Switzerland, according to a spokesperson for the bank.
While Julius Baer would not comment further, Europe (ex- Switzerland) and the Middle East may be more impacted than Asia by the remaining 100 job cuts, says a wealth management source in Singapore. Julius Baer’s 2019 earnings, which were announced today, don’t detail its results for Asia, but highlight a “much increased profit contribution from Asian platforms” and strong net new money inflow from clients in Asia.
Last year Asia accounted for about 25% of the firm’s assets under management, a similar figure to Western Europe, and more than the 15% held by Swiss-based clients. A report released by JB last month estimates that personal financial wealth in Asia will grow by 9.4% from 2018 to 2023, compared with 3.9% in Western Europe.
Despite these upbeat numbers, it’s unlikely that Hong Kong and Singapore will avoid JB’s axe entirely. Julius Bear is likely to cut a small number of underperforming and expensive RMs in Asia this year, in light of its 2019 results, says former Merrill Lynch private banker Rahul Sen, now a global leader in private wealth management at search firm Boyden.
Trimming underperforming bankers would appear to be in line with CEO Rickenbacher’s new three-year strategy to reduce costs by CHF200m in order to boost profitability and deal with continued margin pressures. Moreover, most of the Asian RMs taken on during Julius Baer’s recent hiring spree have now had enough time to prove themselves at the bank – JB knows who the underperformers are.
In 2018, the Swiss bank recruited 30 RMs, taking its headcount to 430, and giving it the fifth largest front-office workforce of any private bank in Asia. Julius Baer grew its RM headcount at a compound annual growth rate of 13.4% between 2014 and 2018, the second highest rate in the region, according to data from Asian Private Banker. This hiring drive was mainly inspired by then CEO (and Asia advocate) Boris Collardi, who left for Pictet & Cie in late 2017. Nearly a quarter of Julius Baer’s staff are now based in Asia.
Whether you work in ultra-high net worth (UHNW) or merely high net worth (HNW) banking is unlikely to affect your job stability at Julius Baer in Asia. “Contrary to industry trends, HNWI will continue to be served in a personal way, with a dedicated relationship manager,” according to a statement from the bank.
Image credit: Keith Chong, Unsplash
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