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Yesterday afternoon, after the market closed, Julius Baer sent the invitations to the adjourned shareholders’ meeting. This is necessary because the dividend is now distributed in tranches.
Bear President Romeo Lacher made no secret of his displeasure. “We are following FINMA’s request despite Julius Baer’s strong capital, financing and liquidity position,” Lacher said.
Bär could have easily maintained the planned total dividend, also thanks to “robust first quarter performance.”
What Lacher expresses with this is clear: Finma, you are not at all. But then stop.
The behavior is embarrassing. Bär’s bosses, most notably President Lacher and his CEO Philipp Rickenbacher, have recently received a strong reprimand from Finma.
They and their bankers had empowered corrupt people from the Venezuelan regime and bought officials of the World Football Association for money laundering from FIFA, for years and systematically.
These two cases alone would have allowed Finma to severely punish Julius Baer and those responsible.
Until now, the finma has refrained from doing so. One is examining proceedings against individuals, it is said in Bern. In view of the misconduct, the supervisory authority is gentle towards current and former bear managers.
Rickenbacher and Lacher had every reason to thank Finma. Instead, they start a dispute over dividends.
His argument: we are not a big bank, we do not have the same risk with loans.
Here too, the tip of the bear speaks nonsense. Remo Stoffel, the mountain construction tycoon, only has a huge Lombard loan. During the crisis, Stoffel sold part of his deposited shares.
In their 2019 annual report, Bär bosses write about bigger and bigger loans so their clients can accelerate as much as possible when they are listed on the stock exchanges.
“Loans increased 7% to CHF 48.4 billion, of which CHF 39.5 billion Lombard loans (+ 10%) and CHF 8.9 billion mortgages (-5%),” he says.
And also: “Our clients’ confidence increased throughout the year, which was reflected in greater transaction activity and greater credit penetration.”
It’s also about special constructions: “The credit team also offers our UHNW clients tailor-made in-house solutions, such as secured cash flow-backed loans secured by unlisted securities.”
Bär is full of credit, at least for the fact that it is a private bank that should live off commissions. The high profit share of the trade shows how much Bär Bank depends on the trade.
Credit locks are opened so that customers can trade even more – this is the bear’s secret to success.
The risks increase accordingly. Bär’s advisers were sweating blood in March when the courses collapsed. They had to make margin calls every minute; Clients were “executed”.
And now President Lacher wants to show the world that there is no need to save dividends and accumulate reserves.
The real reason for recognition towards the supervisory authority is probably another. Bär-Bank management thrives on bonuses. CEO Rickenbacher recently received incredibly high compensation.
Dividends are crucial to keep it that way. If they fail or shorten, this has a direct impact on the bonuses for the best shots.
That is why Lacher and Rickenbacher absolutely want to keep the dividends. They want their own bonus, what else?
