FINMA imposes new controls on Julius Bär

CHF 250 million in additional capital will now sit behind Julius Bär's balance sheet after Switzerland's financial regulator closed a compliance procedure tied to the bank's Signa lending and a money laundering case.

The Swiss Financial Market Supervisory Authority, known as FINMA, announced the measures on September 29, 2026. It also restricted the bank's freedom to reward shareholders: dividends and other distributions must receive prior approval from the regulator.

The action follows two separate areas of concern. FINMA began examining loans to entities within a European group in December 2024, a reference to the private lending extended to Austrian property group Signa. In August 2025, it opened a further procedure concerning possible anti money laundering failures involving clients connected to two Russian politically exposed persons.

FINMA said the case was the fifth compliance procedure involving Julius Bär in less than ten years. The regulator has also begun proceedings against three unnamed former employees who may have breached supervisory law or the bank's internal rules.

For Switzerland's financial centre, the decision adds another regulatory test for a major private bank. It places capital, governance and client due diligence under continued scrutiny while the institution pursues its next strategic phase.

Julius Bär's Signa exposure produced a CHF 606 million write-down in 2023, turning private lending into the bank's defining risk event of recent years.

The loans went to entities associated with Signa, the Austrian property empire built by René Benko. Signa later entered administration. Benko was sentenced to two and a half years in prison by an Innsbruck court in September 2026 after being found to have caused losses to creditors, according to the linked reporting.

Julius Bär's loss led to a leadership rupture. Chief executive Philipp Rickenbacher was dismissed after the bank disclosed the write-down. FINMA then opened its procedure in December 2024, examining the bank's handling of several loans granted to entities within the unnamed European group.

The regulator's measures point to weaknesses that went beyond a single bad credit decision. Julius Bär said it has exited the private lending business, revised its risk management and compliance framework, strengthened governance and installed a new management team.

Private banks in Switzerland routinely serve wealthy entrepreneurs and international clients, but the Signa episode showed how concentrated, complex lending can expose a wealth manager to losses far outside its traditional business. FINMA's capital order now formalises the cost of that lesson.

FINMA confiscated about CHF 10 million in gains tied to two groups of Russian clients described as politically exposed persons, widening the enforcement action beyond credit risk.

The regulator launched a separate procedure in August 2025 to examine possible breaches of anti money laundering rules. The case concerned clients associated with two Russian PEPs. FINMA's decision does not identify the clients in the published account, and the three former employees facing separate proceedings have not been named.

Anti money laundering controls are a central obligation for Swiss financial institutions. Banks must establish who ultimately owns assets, assess the risks surrounding politically exposed clients and monitor whether transactions fit a customer's profile. The source material does not detail the transactions or the specific internal failures alleged in this case.

The confiscation removes gains that FINMA says Julius Bär made from the two client groups. The action also signals that compliance failures can produce a direct financial consequence even when a case does not involve a headline loss comparable to the Signa write-down.

Julius Bär has grouped the response within its broader overhaul of compliance, governance and risk management. The bank's new management team must now demonstrate that the revised framework works across a business serving clients from multiple jurisdictions and risk categories.