His bank, founded just a few years ago, is now getting up to speed. At a time when the Swiss financial industry is in upheaval, Michael «Mike» Baer sees an enormous opportunity. In an exclusive interview with finews.asia, he describes the disappearance of Credit Suisse as a major disaster for the Swiss financial center.
Michael «Mike» Baer belongs to a special breed of banker, admitting to loving the business. Such an assertion is unusual in a financial world dominated by maximizing short-term profits and opportunistic decisions.
To a large extent, this passion drove the great-grandson of Julius Baer, founder of the eponymous Swiss-based bank, away from the wholly structured daily routine in a traditional bank. It came to pass after many years with various employers in the domestic and foreign banking industry that he founded his financial institution towards the end of 2018: MBaer Merchant Bank.
Marathon Man
No sooner had the company launched than the Corona wave thwarted his business plans. Baer, a passionate marathon runner for years, benefited from his experiences during long runs: «Stay calm, stick to the goal, and accept what cannot be changed as a given.»
In his interview with finews.asia, he reflects on the difficult time during the pandemic and the company build-up. The lessons learned from running marathons helped him stick to his strategy of being a small, agile bank and serving entrepreneurs with their companies and families.
MBaer is not a classic private bank but a financial boutique involved in the broadest sense of asset accumulation and the trading possibilities of the money business. In addition to traditional asset management for private individuals through wealth management, the bank offers asset custody, transaction banking for corporate clients, and treasury services for controlling and managing payments.
Over 1,000 Customers
In this way, Baer underlines his conviction that finance can be innovative beyond traditional asset management. Since the difficult initial phase, the bank has gained momentum, and geopolitical conflicts like the Ukraine war haven't changed a thing.
Last year, the bank posted a profit of 3.9 million francs ($4.3 million), a success that continued through the first half of this year with a gain of 6.8 million francs and assets of just under 650 million on a turnover of 19.3 million. Baer emphasized the company has over 1,000 clients, underscoring the business model's sustainability.
Not a Classic Private Bank
About two-thirds of Baer's business is with corporate clients, many of whom require transactions for their needs that larger commercial banks don't offer. Those clients also have part of their private assets managed by MBaer Merchant Bank.
«However, this isn't our main source of income,» Baer emphasizes. The 3.5 billion francs of assets under management isn't indicative of the company. «We're not a classic private bank.»
Rapidly Increasing Headcount
It may well be that offering banking services that go far beyond traditional asset management, requiring expertise that other players don't necessarily have, is the differentiating factor compared to other financial institutions. This focus has contributed to the massive growth in MBaer Merchant Bank's workforce over the past twelve months.
The bank had around 30 people on the payroll a year ago, and «there will probably be 60 by the end of 2023,» says Baer, not without pride in such growth expectations.
Disaster for the Swiss Financial Industry
The profound changes in the Swiss financial industry impacted Baer's bank this year. It's a «catastrophe» now with only one major bank in the Swiss financial center. With their sometimes highly individualized needs, corporate clients had an alternative, which has disappeared and can only be absorbed to a limited extent by the other Swiss banks. «As a result, foreign financial institutions will be increasingly active in this country and gain market share,» concludes Baer.
Uncertain customers transferred some of their assets to MBaer Merchant Bank, and bank employees willing to move came forward on an unprecedented scale. «In response to a job ad, we received around 100 applications in two days,» he says but emphasizes events surrounding the Credit Suisse showdown in March were only the result of an industry-wide development that had begun much earlier.
Vacations à discrétion
«In discussions with applicants, I've heard repeatedly how people at larger banks feel constricted in their work processes and can't develop their full potential at all,» says Baer.
The extent to which Mike Baer is committed to an optimal working atmosphere was demonstrated last year with a campaign that could have been dismissed as a marketing stunt. The company boss left it up to each employee to take as much vacation as they saw fit.
Great Personal Responsibility
This attracted some industry attention. Baer's main concern was whether this experiment would prove successful in everyday working life. «All colleagues work very hard, sometimes very long hours and often outside normal working hours. This is to be duly rewarded with appropriate vacations,» says Baer.
In the meantime, the first conclusions can be drawn. «The arrangement is based on a great deal of self-responsibility, which my colleagues are happy to take on. There have been no excesses,» says Baer, adding that he conducts two annual reviews with each employee. «I want to know how each of us is doing at work.»
