Julius Baer profit jumps 128% despite lingering de-risking drag

Julius Baer posted net profit of 673 million francs for the first half of 2026, a 128% increase from the prior year when earnings were depressed by heavy loan loss provisions. The robust bottom-line recovery, however, masked a slower top-line momentum as the Swiss private bank continues to deliberately shed risky clients to stabilize its operations.

Annualised net new money growth came in at 2.2%, beating market expectations but remaining far below the firm's medium-term ambitions. This shortfall is the direct result of a revised risk and compliance framework that the bank is actively enforcing across its operations. The framework was implemented as a direct response to the heavy losses the bank previously suffered from risky lending.

"De-risking takes time," CEO Stefan Bollinger told reporters. He noted that the ongoing process involves exiting relationships with certain client types located in high-risk countries or operating within sensitive industries. While Bollinger declined to quantify the expected financial impact for next year, he explicitly warned that the drag on growth will persist into 2027.

Despite the near-term pressure on client acquisition, the bank reiterated its net new money growth target of 4% to 5% by 2028. For market analysts, maintaining this guidance suggests that executive leadership remains confident the current compliance overhaul will eventually lay the groundwork for more sustainable, lower-risk asset gathering.

For equity investors, a critical unresolved issue is the timeline for capital returns. Julius Baer once again declined to provide a specific date for when it might resume share buybacks. Any repurchases remain strictly contingent on the outcome of an ongoing assessment by the Swiss regulator.

Bollinger did allude to recent progress on the regulatory front, linking it to the completion of a comprehensive management reshuffle. "This moves into the right direction," he said. "We have now the second line in place and so we're feeling very good about our setup."

That management overhaul is scheduled to conclude next month. Earlier this month, Julius Baer announced that Peter Burrill will join as its new chief financial officer in August, subject to regulatory approval. His pending arrival will complete a total reset of the bank's executive suite following the losses from risky lending that triggered the current de-risking phase.