2. Banker Infighting
Julius Baer has named a CEO, but make no mistake: the bank is nevertheless prone to sink into infighting. A 20-year veteran of the bank, Hodler was also only named deputy boss two months ago in what now appears to be a bizarrely lucky turn of events. Then, the bank gently nudged him aside in his risk job in favor of a UBS banker who joins next year. Hodler's age (see point 1) also makes him somewhat of a semi-permanent solution.
Top executives including European head Yves Robert-Charrue are sure to begin jockeying for position. Worse, Julius Baer has two top management layers: one of six bankers, another, more extensive ones including the powerful regional heads of 12 people. It is no coincidence that the bank has made clear that it is already looking for Hodler’s replacement. The message internally? Simmer down and behave.
3. Where's Organic Growth?
Collardi loved big acquisitions for growth: as a 35-year-old CEO in 2009, one of his first moves was to buy Dutch bank ING's private bank in Switzerland. A host of deals including the 2015 purchase of Merrill Lynch outside the U.S., Italian asset manager Kairos, Commerzbank in Luxembourg, Bank Leumi's Swiss private bank, and Swiss wealth manager Wergen followed.
But the days of «buying» net new money are over: turbo-banker Collardi told investors last year that Julius Baer would take its pedal off the gas and instead focus more on organic growth. His departure is a serious blow to those efforts, provided Collardi is successful in luring highly productive Julius Baer bankers over to Pictet.
4. Cost-Cutting Onus
Like at universal banks UBS and Credit Suisse, cost-cutting has become a central element of private banking. Collardi has managed to offset the spending for expansion into volume growth, but as Berenberg analysts warned earlier this year, the bank now needs several factors outside its controls to fall into line – just to keep margins flat.
The bank's cost-income ratio stands at an acceptable 69 percent, and Collardi has avoided large-scale cuts like those which have befallen bigger rivals. His successor may not have as much luck avoiding major, unpleasant spending cuts.
5. Managing «Little Lords»
One peculiarity of Julius Baer is that some private bankers have, over years, successfully built up fiefdoms within Julius Baer. They don't take kindly to having their influence curtailed, as previous potential CEO candidate Barend Fruithof learned painfully after tangling with the «bears» of Baer.
