Julius Baer CEO Bernhard Hodler capped his first year in the job being raided by his predecessor. What awaits him after 12 months of crisis-fighting, and who has designs on his job?
Bernhard Hodler oversaw Julius Baer’s risk-taking for most of his 20 years with the Swiss private bank. Last year, he was as suddenly vaulted into the top spot when Boris Collardi blindsided the bank by defecting to Pictet.
The 58-year-old has had little joy in his first year: Julius Baer was raided by Pictet nearly one year to the day that Holder took over, has been roiled by a massive Latin American graft scandal, Switzerland’s regulator is probing, and the bank is irritating clients with a major regulatory swabbing of their accounts and paperwork.
Breaking With Collardi
Hodler, the bank’s long-standing risk chief, has throttled the decade of dizzying growth overseen by his predecessor. Julius Baer’s shares, which had risen as the bank’s hoovered up assets, have foundered since he took over. The stock is down by nearly one-third since Hodler took over the reins from Collardi (pictured below).
Besides the clean-up, Hodler is also ticking off a list of equally unglamorous tasks that won’t exactly dazzle investors: Julius Baer rolled out a costly new IT platform in Asia this spring, and is evaluating how to introduce the technology in its home market as well.
The risk manager-turned-CEO has also made seemingly subtle changes that limit the influence of Julius Baer’s powerful private bankers. Hodler has reinforced the role of compliance officers, according to two sources familiar with the matter: private bankers can no longer can no longer rely on a CEO override if they disagree with a compliance decision, as was common under Collardi, they say.
«Accidental» CEO's Coup?
Last month, Hodler said Julius Baer would tighten its belt heading into bonus season after its cost-income ratio rose above its target when revenue dipped. Though the bank won considerable net new money, stock market swings wiped them out again. In the end, Julius Baer’s assets rose a mere 2 percent to 395 billion Swiss francs ($397 billion).
He is also revamping Julius Baer’s pay scheme to tie bonuses more closely to revenue and profits, instead of net new money. Hodler, who was quietly talking retirement plans when he was thrust into the top job last year, isn’t likely to cling to power. But after a year of reorganizing, cleaning up, tightening, and making orderly, the «accidental» CEO will look for a coup, a project to call his own.
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