The Swiss financial regulator FINMA has concluded its enforcement proceedings against Julius Baer, a decision the bank announced on Tuesday, September 29, 2026. The proceedings addressed a significant credit event in the bank's former private debt business and historical anti-money laundering (AML) issues involving certain client groups. Stefan Bollinger, Julius Baer's Chief Executive Officer, stated that the conclusion marks an important milestone, acknowledging the bank's efforts over the past 20 months and the implementation of comprehensive remedial measures by its revamped Executive Board and new strategy.
FINMA's findings indicated serious violations of risk management and AML regulations. Specifically, the bank was criticized for its handling of private debt loans to a European group, which included more than CHF 1 billion ($1.07 billion) in exposure during 2022 and 2023, ultimately leading to a full write-down of CHF 586 million ($627 million) outstanding at the end of 2023. Additionally, deficiencies were identified in managing high-risk clients associated with two Russian politically exposed persons (PEPs), where Julius Baer failed to adequately verify asset origins or scrutinize negative media reports. FINMA has also opened proceedings against three former employees.
As a result of the enforcement, Julius Baer is now required to hold an additional CHF 250 million ($268 million) in Common Equity Tier 1 (CET1) capital, a reduction from the previous requirement of CHF 500 million ($535 million). This results in a de facto minimum CET1 capital ratio requirement of 9.4%. The bank's reported CET1 capital ratio was 18.5% at the end of June 2026, indicating a robust capital position. FINMA will confiscate approximately CHF 10 million ($10.7 million) in profits obtained by Julius Baer through the regulatory breaches with the two Russian PEP client groups. Dividends and other shareholder distributions will require FINMA's prior approval until the bank divests client assets outside its risk appetite. Julius Baer has submitted a request for a share buyback program, pending FINMA's final approval.
In response to the issues, Julius Baer has wound down its private debt business, revised its risk and compliance framework, fundamentally upgraded its risk organization and processes, and renewed its governance at the Board of Directors and Executive Board levels. The current management team was not in office when the violations occurred. The bank confirmed its commitment to its Strategic Cycle 2026–2028 and its medium-term financial targets, with assets under management totaling CHF 547 billion ($585 billion) at the end of June 2026. The bank must report to FINMA on the development of its risk, error, and compliance culture until 2032.
