logo
Julius Baer seeks to cut bonuses of bankers with risky books: sources

Julius Baer seeks to cut bonuses of bankers with risky books: sources

Business Times17-07-2025
[ZURICH] Julius Baer Group plans to reduce the bonuses of relationship managers who generate revenue from high-risk business, as the bank seeks to introduce a new pay culture, according to people familiar with the matter.
The amount that advisers will see their pay docked varies depending on factors such as the type of transaction and the type of market involved, the people said, asking not to be named discussing remuneration. The change is pending regulatory approval, one of the people said.
The move comes as the bank's new chief executive officer Stefan Bollinger and chairman Noel Quinn seek to reset the Swiss bank and put it on a path for growth after a string of missteps, including running up a US$700 million exposure to Rene Benko's real estate empire.
At an investor event in London last month, Bollinger said the bank was reviewing the compensation model with the aim to better align relationship managers' incentives with the interests of the bank and its shareholders.
'We want to incentivise the RMs to focus predominantly on long-term sustainable growth and therefore we will be very focused on the quality of net new money,' he said.
A Julius Baer spokesperson said the changes, which are pending board approval, would 'preserve the essence of our framework, as we pay for performance and want to attract the best talent.'
Wealth managers have different compensation models but often incentivise bankers through bonus payments that are tied to new assets they bring in.
In June, Baer unveiled fresh targets and reintroduced a goal for net new money, which Bollinger stressed was underpinned by strengthened risk management. 'Risk management is my DNA, and I will be laser-focused on this,' Bollinger said.
In its interim earnings update in May, the bank announced that Ivan Ivanic was taking over as chief risk officer from Oliver Bartholet, who was retiring. It also said the executive board would be strengthened by a new compliance officer role, to be announced in due course. BLOOMBERG
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

BOJ may paint less gloomy view, signal rate-hike resumption
BOJ may paint less gloomy view, signal rate-hike resumption

Business Times

time2 hours ago

  • Business Times

BOJ may paint less gloomy view, signal rate-hike resumption

[TOKYO] The Bank of Japan (BOJ) is set to hold off raising interest rates on Thursday (Jul 31) but may offer a less gloomy view on the outlook after Tokyo's trade agreement with the US last week, signalling rate hikes may resume later this year. Receding global trade tensions following Sunday's agreement between the US and the European Union add relief for BOJ policymakers on the outlook of Japan's export-heavy economy. But the BOJ is likely to warn of lingering uncertainty on how US tariffs affect business activity with the hit to exports seen intensifying later this year, analysts say. 'It's very big progress that reduces uncertainty for Japan's economy – but obviously, some uncertainty remains,' BOJ Deputy Governor Shinichi Uchida said last week on the Japan-US trade deal. Uchida noted questions around how soon Washington strikes trade deals with other countries, how the tariffs affect domestic and global economies and how long it could take for the tariffs' effects to be seen in hard data. At the two-day meeting ending on Thursday, the BOJ is widely expected to keep short-term interest rates steady at 0.5 per cent. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Markets are focusing on the bank's quarterly outlook report and Governor Kazuo Ueda's post-meeting news conference for clues on the timing of the next rate hike. A Reuters poll, taken before last week's Japan-US trade deal announcement, showed a majority of economists expect the BOJ to raise rates again by year-end. In the quarterly report, the BOJ is likely to revise up this fiscal year's inflation forecast due to persistent rises in rice and other food costs, sources have told Reuters. The BOJ may also tweak its current view that risks to the price outlook were skewed to the downside, and offer a less gloomy view on the economy compared with the current one focused on tariff-induced risks, according to separate sources. The board is likely to maintain its view that inflation will durably hit its 2 per cent target in the latter half of its three-year projection period running through fiscal 2027, they said. In current projections made on May 1, the BOJ projects core consumer inflation to hit 2.2 per cent in fiscal 2025, before slowing to 1.7 per cent in 2026 and 1.9 per cent in 2027. Japan struck a trade deal with President Donald Trump last week that lowers US tariffs for imports of goods, including its mainstay automobiles, easing the pain for the export-reliant economy and clearing a key hurdle for further BOJ rate hikes. The positive development contrasts with the gloom that surrounded the economy on May 1, when the BOJ produced its current estimates amid heightened market volatility caused by Trump's April announcement of sweeping 'reciprocal' tariffs. The BOJ exited a decade-long, massive stimulus last year and raised its short-term policy rate to 0.5 per cent in January on the view that Japan was progressing towards durably achieving its price goal. With rising food costs hurting households and keeping inflation above its 2 per cent target for three years, some hawkish board members have highlighted mounting price pressures that could justify resuming rate hikes. REUTERS

Several US executives to visit China this week: Sources
Several US executives to visit China this week: Sources

Straits Times

time3 hours ago

  • Straits Times

Several US executives to visit China this week: Sources

Find out what's new on ST website and app. A high-level delegation of American executives will travel to China this week to meet senior Chinese officials. BEIJING - A high-level delegation of American executives will travel to China this week to meet senior Chinese officials in a trip organised by the US-China Business Council (USCBC), two sources with knowledge of the visit told Reuters on July 28. The visit coincides with the latest round of US-China trade negotiations in Sweden , where China's Vice-Premier He Lifeng is meeting US officials from July 27 to July 30 for a new round of economic and trade talks. The delegation will be led by FedEx Chief Executive Rajesh Subramaniam, the council's board chair, one of the sources briefed on the trip said. The South China Morning Post first reported the visit on July 27, saying that executives from firms including Boeing would be part of the delegation. Reuters could not confirm other CEO members of the delegation or which Chinese officials they would meet. Boeing declined to comment on the trip and deferred to USCBC. The US government was not involved in the organisation of the visit, one of the sources said. The trip comes as Beijing and Washington work towards a summit between the two countries' leaders later in 2025, probably around the time of the Apec forum in South Korea October 26 - November 1, sources previously told Reuters. USCBC did not respond immediately to a request for comment. The business lobby previously organised similar visits to China by American CEO delegations in 2023 and 2024. The 2024 trip, also led by Mr Subramaniam, included meetings with Mr He and Foreign Minister Wang Yi, where executives discussed issues including market access. China faces an August 12 deadline to reach a durable deal with the White House or risk higher US tariffs. US officials are likely to extend the deadline by another 90 days as both sides work towards a more comprehensive deal, sources previously told Reuters. An extension of that length would prevent further escalation and help create conditions for the potential meeting between Mr Trump and Chinese President Xi Jinping. REUTERS

Airwallex launches investment product to help businesses grow idle cash
Airwallex launches investment product to help businesses grow idle cash

Straits Times

time3 hours ago

  • Straits Times

Airwallex launches investment product to help businesses grow idle cash

Find out what's new on ST website and app. The new Airwallex Yield product is aimed at small business customers or customers on Airwallex. SINGAPORE - Fintech firm Airwallex has unveiled a new investment product aimed at helping businesses earn returns on unused funds, entering a competitive market where rivals also court companies seeking better yields on spare cash. Rolled out on July 28, the product invests in money market funds (MMFs) and offers returns of up to 1.29 per cent per annum for Singapore-dollar funds and up to 3.84 per cent for US-dollar funds. The new Airwallex Yield product is aimed at small business customers or customers on Airwallex, said Mr Arnold Chan, Airwallex's general manager for Asia-Pacific excluding China. 'Airwallex Yield will allow businesses to earn returns on their surplus Singapore-dollar and US-dollar funds by investing through investment-grade money market funds, while maintaining access to both liquidity and control over their cash,' he told The Straits Times. A MMF invests in a range of liquid, low-risk assets, which typically include cash and short-term instruments such as treasury bills, commercial paper, and certificates of deposit. Airwallex's yield product invests in several Goldman Sachs and Fullerton funds. The Singapore launch follows earlier rollouts in Australia and Hong Kong. Since its November 2023 debut in Australia, the product has attracted about US$200 million (S$256 million) in funds. Airwallex offers a suite of financial products for businesses, including global business accounts, cross-border payments and expense management tools. The firm said it is seeing a huge demand from customers in Singapore who want to earn returns while maintaining flexibility to move funds quickly. Over 80 per cent of its annual revenue comes from customers who use more than one Airwallex service and the firm expects to cross-sell the new product to its existing customers. The firm also plans to target technology companies, especially those backed by venture capital and holding substantial idle cash reserves, as well as e-commerce players and retailers that receive customer payments upfront but pay suppliers later. By investing these interim funds, they can generate additional returns. Trading businesses involved in importing and exporting can also benefit by putting their idle cash or working capital to work, said Mr Chan. He added that withdrawals are flexible and settlement is typically completed within one business day, provided that cut-off times were met. Airwallex joins a competitive field in Singapore, where firms like StashAway and Syfe already offer MMF products to businesses seeking returns on idle cash with flexible access. Most MMFs in Singapore invest in fixed deposits, government securities and commercial papers. Airwallex customer GlobalTix, a ticketing software and distribution platform for the tourism sector, said that it considers flexibility, liquidity, tenure and yield as key factors when deciding how to deploy idle cash. GlobalTix's co-founder and chief operating officer Chan Chee Kong said fixed deposits are less suitable for the company because they tie up funds for a set period – limiting access when quick payments to suppliers or vendors are needed. 'I need to have that flexibility around moving my funds in and out,' he said. Another key consideration is managing different currencies given the global nature of the firm's business, he added. He noted that Airwallex is not the first to offer the solution, adding that GlobalTix currently uses a similar offering from a competitor. However, if GlobalTix were to use Airwallex's new offering, it would benefit from having all its financial tools on a single platform – making it easier to monitor and manage its cash flow, he said. Lovet, a homegrown fashion brand and Airwallex customer, is considering the new yield product, its director Lee Wei Leong said. With interest rates declining, he said the company is exploring options. 'If we leave our money in a normal savings account, the value of the money is going to be eroded by inflation.' As an SME without venture capital backing, liquidity is key. If Lovet were to open a new outlet, it will need to be able to cash out quickly to fund the expansion, he added.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store