Julius Baer Group Ltd.
Update on private debt exposure in light of recent market developments

Ad hoc announcement pursuant to Art. 53 LR

Zurich, 27 November 2023 – Julius Baer announced in its Interim Management Statement for the first ten months of 2023 on 20 November 2023 that it had booked provisions of CHF 70 million against the Group’s credit portfolio after 31 October 2023. The Group confirms that this amount was primarily related to the single largest exposure in its private debt loan book. This nominal exposure amounts to CHF 606 million, comprising three loans to different entities within a European conglomerate. The aggregate exposure towards this client group is secured by multiple collateral packages related to commercial real estate and luxury retail and is now subject to a longer-term restructuring. Julius Baer has taken measures to protect its interest and to preserve the value of its collateral and, if and when appropriate, the Group will remain prudent in booking further valuation adjustments as required.

Julius Baer has a strong capital position with a CET1 capital ratio of 16.1% as of 31 October 2023, significantly above the Group´s own floor of 11% as well as the regulatory requirement of 8.2%. Even under a hypothetical total loss scenario, the Group’s pro-forma CET1 capital ratio at 31 October 2023 would have been in excess of 14% and Julius Baer would have remained significantly profitable.

Julius Baer offers private debt as a structured finance solution exclusively within its holistic wealth management value proposition for UHNW clients. As of 31 October 2023, the private debt loan book amounted to CHF 1.5 billion as part of a total loan book of CHF 41 billion. The above-mentioned exposure is the largest in the private debt loan book. The remaining portfolio comprises loans to unrelated counterparties and various sectors with strong asset quality. The second largest private debt exposure amounts to CHF 216 million and the third largest to CHF 140 million, neither of which is related to the real estate sector. The rest of the portfolio consists of exposures of a considerably smaller size to 19 unrelated counterparties.

Philipp Rickenbacher, Chief Executive Officer of Julius Baer Group Ltd., said: “Julius Baer is very well capitalised and has been consistently profitable under all circumstances. We regret that a single exposure has led to the recent uncertainty for our stakeholders. Together with investing and multi-generational wealth planning, financing is an inherent part of the wealth management proposition to our clients. On this basis, together with the Board of Directors, we will review our private debt business and the framework in which it is conducted.”

Capital policy reconfirmed

Julius Baer reconfirms its capital distribution policy, under which it targets a dividend payout ratio of ~50% of adjusted net profit attributable to shareholders of Julius Baer Group Ltd., with the dividend per share at least equal to the previous year’s dividend per share. In addition, under this policy, CET1 capital that is meaningfully in excess of a CET1 capital ratio of ~14% at the end of a financial year will be distributed through a share buy-back programme launched in the subsequent year, unless acquisition opportunities arise that are strategically consistent and financially attractive.

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About Julius Baer

Julius Baer is the leading Swiss wealth management group and a premium brand in this global sector, with a focus on servicing and advising sophisticated private clients. In all we do, we are inspired by our purpose: creating value beyond wealth. At the end of October 2023, assets under management amounted to CHF 435 billion. Bank Julius Baer & Co. Ltd., the renowned Swiss private bank with origins dating back to 1890, is the principal operating company of Julius Baer Group Ltd., whose shares are listed on the SIX Swiss Exchange (ticker symbol: BAER) and are included in the Swiss Leader Index (SLI), comprising the 30 largest and most liquid Swiss stocks.

Julius Baer is present in around 25 countries and over 60 locations. Headquartered in Zurich, we have offices in key locations including Bangkok, Dubai, Dublin, Frankfurt, Geneva, Hong Kong, London, Luxembourg, Madrid, Mexico City, Milan, Monaco, Mumbai, Santiago de Chile, São Paulo, Shanghai, Singapore, Tel Aviv, and Tokyo. Our client-centric approach, our objective advice based on the Julius Baer open product platform, our solid financial base, and our entrepreneurial management culture make us the international reference in wealth management.

For more information visit our website at www.juliusbaer.com