Julius Baer reveals his business in Russia today. He is proud. 1.6 percent of customer assets at the end of April out of a total of 457 billion owned by superpowers.
The number comes to 7.3 billion and relates only to Russians who do not officially reside in Switzerland nor in the European Economic Area.
For example, not Victor Vekselberg. This was a customer of Julius Baer for a long time and was carrying a lot of money with the residents of Zurich. Vekselberg moved the center of his life to Switzerland.
This means that Bär-Bank takes care of many of the money and assets of other rich Russians.
Notable Kremlin clients include Alisher Usmanov. The man with the big yacht, now banned, worked in Lausanne as president of the World Fencing Federation.
It belonged to the brilliant Russian customers of Bär Bank, as did German Khan of the Alfa Group. Khan and Usmanov were on the sanctions lists of Switzerland and the European Union, while the USA is going after Vekselberg.
Julius Baer’s management, in its 4-month progress report this morning, emphasized the “continuing high level of client activity” which “contributed to a significant recovery in the Group’s gross margin compared to the second half of 2021”.
This came to nearly 85 basis points.
In the apples-to-apples comparison — the change compared to the first four months of 2021 — the margin looks less impressive.
The bear wrote “a decrease of 5 basis points compared to about 90 basis points” at the beginning of last year.
The collapse in the markets and the abrupt end of their Russian business, now completely frozen, created an unfamiliar situation.
Instead of the usual large amount of new money, Julius Baer showed the outflow of customer money from January to the end of April: minus 2.7 billion.
Oops. A “new phase of profitable growth” is now being introduced, with Barr CEO Philip Rickenbacher trying to distract from the decline. Quality rather than quantity – this is the new creed on Bahnhofstrasse.
Many oligarchs and other clients close to the Kremlin still worry about the great asset manager.
Mortgage grants and Lombard loans were part of the standard show for the wealthy from the gigantic empire of the East, now cursed.
US investigations into the CS about the oligarch’s loans give a foretaste of possible troubles. In any case, Bär-Bank seems to have run a proud Russian company compared to its size.
She wanted to keep doing this until the end. From CS, appointed its head for Russia and responsible for emerging markets in Central Asia, Dmitriy Koshevwhich is said to have a significant impact.
As soon as the manager started at Bär in early April as the successor to the “legendary” Smuschkovich, the bank wanted nothing more than to leave.
“Julius Baer has begun closing its consulting branch in Moscow, in compliance with local regulations and contractual arrangements,” she said. “The net asset value of this entity as at December 31, 2021 was 0.4 million Swiss francs.”
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