Julius Baer Faces Bleak 2003

by Philip Morton, Investors Offshore.com

13 March 2003

According to a Reuters report published yesterday, Switzerland's largest family-controlled bank is gearing up for a bleak 2003, following its posting of a substantial drop in 2002 net profits.

Bank Julius Baer announced on Wednesday that its net profits fell almost 19% to SFr183 million ($138 million) as the result of weak financial markets in 2002, and predicted a similarly large decline this year.

'If operating conditions do not soon take a decisive and sustained turn for the better, net profit for the current year will turn out to be considerably lower than that of 2002,' Baer chief executive, Walter Knabenhans told Reuters, warning darkly that the decline is likely to be in the 'double-digit region'.

The Swiss bank has announced plans to accelerate cost cuts and slash jobs, and told Reuters that some 10% of staff will likely face the chop by the end of the year. However, no further job cuts are on the cards after that, according to Chairman-designate, Raymond Baer.

'Once we've done this, nobody can say we haven't done our homework,' he explained to the news agency.

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