Bellevue Group has yet to leave the troubled waters behind it. Indeed, it will have to do some more restructuring.

André Rueegg, the CEO of Bellevue Group, didn’t take it lightly: The closure of the brokerage and corporate finance business, with the elimination of 25 jobs, entails letting go of close colleagues.

But the radical cut and closure of the former core business also marked the start of a rebuilding process. In other words: More restructuring, more transition years, more uncertainty.

Years of Losses

«I also wish we would be done with it,» Rueegg said. He joined Bellevue in 2009 and developed asset management – since 2015 he is the company’s CEO.

Bellevue has never really returned to the calm waters following the failed merger with Swissfirst in 2006. And one of the reasons was the very DNA of the company: The transactions business with brokerage and corporate finance.

Once a rich source of revenue, those units have gone into decline well over a decade ago. The decline led to years of losses at Bellevue Bank and happened under the watchful eyes of the board of Bellevue.

Strategy Does Work

It wouldn’t be right to say that Bellevue was passive. It defined a strategy a few years ago and it seems to work: A shift away from the transactions business to the recurring revenue of wealth management, and a reduction of the dependence on BB Biotech and the health-care industry toward a broader diversification of asset management.

This is the part of the restructuring that worked out well: Asset management is growing and has become more solid with the takeover of Germany’s Starcapital last year. The money it earns will be used to take on the second half of the restructuring: The complete makeover of the bank.

There is much left once brokerage and corporate finance have been taken away: Some trading, some market-making and custody services.

Closing Bank Makes No Sense

But the Bellevue Group entails having a bank, a banking license. The financial market takes Bellevue Group as a bank and new customers at wealth management are more than happy that the company has a banking license. It would have been counterproductive to close the bank, Rueegg says.

The bank offers its client a sense of regulatory safety and provides the regulatory framework for the whole group going forward. The bank also has a true value in as much as it provides loans to the clients of wealth management.

The bank also keeps safe the securities of customers, which is very important to them. And lastly, the bank will offer its services across borders.

Several Years of Reconstruction

But first, there’s some deconstruction work to do. The company estimates that this will cost 3 to 5 million francs and is likely to result in yet another loss. The next phase, the revitalization stage, is due to be launched in the second half of the year.

The aim of the exercise: A pure play asset management alongside a wealth management with a comprehensive range of services for entrepreneurial private clients.

Rueegg says the reconstruction process will last two to three years. He reiterated that the company will likely resort to takeovers to accelerate the revitalization of the company.

No Other Option

Times aren’t easy and Bellevue’s intentions demand a sense of respect – after all, Swiss banking is undergoing a wave of consolidation, regulation is getting tighter, costs are rising and margins shrinking.

Closing down the brokerage and corporate-finance business is tough. But the board resorted to this measure because it had no other options available. The decision was necessary if the bank is to survive.