When Barend Fruithof suddenly left Julius Baer a year ago, Gian Rossi took over as head of Switzerland. He explains his plans for the Swiss unit, including new fintech applications and potential takeover targets in an interview with finews.asia.
Gian Rossi, a little over a year ago all of a sudden you had to take charge of Julius Baer Switzerland. What was your first priority?
I have now been at the bank for 11 years and also been in charge of the Swiss business for the first six of those years. That’s why I knew most of the members of staff – so, in a way, it was a homecoming.
It was that simple?
The Swiss business had been through several changes of leadership within a short period of time. It was therefore important to me to instill a sense of continuity in the region. And it was that mission which CEO Boris Collardi had entrusted me with.
You are known to be close to Boris Collardi. After the hectic period with Barend Fruithof it is upon you to keep things calm?
No, we have a clear mandate to grow. For me, the appointment to lead the home market was a great honor.
«We are proud to have created jobs in Switzerland even in times of crisis»
Because it is still the by far most important region for the bank – if Asia is its second home, Switzerland is its first. And we are proud to have created jobs in Switzerland even in times of crisis.
In other words, you may still hire more staff?
Yes, we want to add strength in a targeted manner in Switzerland. This is true also for support functions, be it wealth and taxation planning or compliance. Apart from relationship managers, such specialists are much sought after nowadays.
The specialists obviously know what they are worth. It has been said that the Swiss business of Julius Baer was dominated by relationship managers with big books, the bankers who behave like small kings. Does this ring true?
I don’t see any such behavior. If you give plausible targets to staff in Switzerland, they are going after them with great enthusiasm. But the Swiss insist on entrepreneurial freedom and flat hierarchies.
Which may help explain why Julius Baer operates no fewer than 14 branches in Switzerland. An anachronism?
Not at all. I take great pride in our Verbier branch for example, where we had to move to bigger offices due to our growth rate. We are growing above-average the outside the urban centers.
So the proud Zurich-based bank is going provincial?
When I joined the bank eleven years ago, we identified the blank spots on the Swiss map and decided to conquer them – Zug, the winter sport resorts, Eastern Switzerland, Lausanne. Still, if you want to really achieve something, you need at least six experienced relationship managers in a branch. And a lot of time.
«Looking at the younger generation, one day we will be confronted with the question of how much physical presence we need to maintain»
That’s why it is important to carefully evaluate the placement of a new branch. Parts of Basel region and the canton of Argovia we can serve very well from Zurich or Basel.
In other words, you will stick to the current network of branches?
All 14 branches are profitable and we aim to be close to our customers. But looking at the younger generation, one day we will be confronted with the question of how much physical presence we need to maintain.
In your first-half report, you fail to mention net new growth in Switzerland. Because there was none?
We grew in Switzerland with both domestic and foreign customers. But I took measures to ensure profitable growth. Net new money is important, but in the long run, it is even more important to maintain profitable customer relations.
So you got rid of clients who didn’t generate money for the bank?
We have the problem with negative rates on cash holdings in Switzerland. We aren’t passing on the punitive rates to clients who use our banking products. By year end, almost all domestic clients will be signed up to an adviser mandate. But we don’t want to be a mere deposit for cash holdings.
Nevertheless, Julius Baer has a claim to leadership in Swiss private banking. With the situation as it is, you can only live up to the claim if you buy other companies, correct?
The number of providers has fallen over the past couple of years. I expect consolidation to continue.
«I have names in mind, with whom we might start negotiations»
Currently, some are trying to simply keep going. But with negative rates and the impending introduction of new regulatory requirements, certain companies will think hard about whether to continue with their business.
In other words, Julius Baer will soon buy a rival?
The times are quiet, currently. We are not in any negotiations. Of course, I have some names in mind, with whom we might start negotiating. Those banks, which have branches in the same places as we have, are interesting, because we would be able to generate synergies.
The description fits Raiffeisen unit Notenstein La Roche, which soon will have managed the turnaround. Wouldn’t it fit with Julius Baer?
Notenstein La Roche is a great brand, with experienced staff. Add to that the clear Swiss focus. The company has been linked with us by the media.
You recently accelerated your efforts in fintech – for instance with a stake in Nectar, a digital wealth manager or your own mobile-banking app. What’s your aim in this respect?
Obviously, a bank has a lot of information about purchases and investments of their clients. We need to analyze the data much better, also to make results available to our clients.
«I see enormous potential in the digitization of administration»
It is also possible to create digital networks, allowing customers to exchange investment ideas and business plans. However, data protection will remain very important.
A Facebook for clients?
Our clients always are interested in what others are doing. I see enormous potential in the digitization of administration – compliance, the opening of accounts, risk appreciation. Automated processes will help to gain quality time for our customers.
More concretely: what can we expect from the fintech specialists at Julius Baer in the near future?
We will launch our integrated-advisory-platform next year. It will allow us to make investment decisions and risk adjustments with the help of algorithms – but also as an add-on to human advisory. It will first be introduced in Europe, later Switzerland and the rest of the world will follow. We are expecting a lot from this in the coming three years and I’m looking forward to this.
Gian A. Rossi has been at Julius Baer for 11 years. He is close to Boris Collardi, the bank’s CEO. Not just because of time spent together at Credit Suisse and their years in Singapore, but also because Rossi, 46, has stood by his boss during difficult times. When Barend Fruithof surprised with a sudden departure last year, Rossi took over. He is well-connected at the bank, knows the business and enjoys a great reputation.
