Julius Baer's Turnaround Play: Why the Swiss Wealth Manager is Now a Buy

In the competitive world of private banking, Julius Baer has long been seen as a laggard—hobbled by inefficiencies, regulatory missteps, and a lackluster growth trajectory. But with its newly unveiled strategy of aggressive cost-cutting, geographic focus, and ultra-high-net-worth (UHNW) client targeting, the Swiss bank is making a bold case for a turnaround. The question is: Do these measures address its core weaknesses, and does the stock now warrant a buy?

The Cost-Cutting Overhaul: Fixing the Leaky Ship

Julius Baer's new CHF 130 million cost-savings target by 2028 builds on its recent track record of overdelivering. The bank exceeded its 2023–2025 goal by CHF 20 million, and now aims to achieve a 50% net savings ratio through operational streamlining, tech infrastructure simplification, and cuts to non-personnel expenses. This isn't just about trimming fat—it's about addressing a core weakness: a bloated cost structure that once led to a shocking CHF 586 million loss.

The strategy's credibility? Already, Julius Baer has beaten its 2026 cost-to-income ratio target of below 67%, two years early. This leaner model creates a critical buffer against economic downturns—a key concern for wealth managers in a slowing global economy.

Growth: Targeting the Top 20% of Clients

The bank's growth ambitions are equally bold. Julius Baer aims for 4–5% annual net new money (NNM) growth by 2028, well above the industry's 2–3% average. To achieve this, it's doubling down on its core markets—Italy and Asia—while exiting unprofitable regions like Brazil. The focus is on UHNW clients, who account for 80% of wealth management profits. A new UHNW Competence Centre will prioritize personalized, high-margin services for this cohort.

This shift addresses another core weakness: a scattered geographic footprint and reliance on lower-margin clients. By concentrating on where the money is, Julius Baer is positioning itself to outpace rivals.

Risk Management: Building a Disciplined Culture

Regulatory missteps have plagued Julius Baer in the past, but the bank is now overhauling its risk culture. Ivan Ivanic, a seasoned risk expert, has been appointed Chief Risk Officer, and oversight is being centralized. The goal? A “disciplined ownership culture” that avoids past compliance pitfalls.

This is critical. Regulatory fines and reputational damage from past failures—such as its role in the FIFA scandal—have weighed on the stock. A stronger risk framework could stabilize the bank's footing and unlock investor confidence.

Valuation: A Discounted Gem in a Premium Sector

Julius Baer's shares trade at 1.2x book value—a stark discount to peers like UBS (1.5x+) and Lombard Odier (1.6x). Analysts, including Citi, see upside potential if targets are met. A price target of CHF 14–16 by end-2026 implies a 30% upside from current levels.

Risks? Yes—but the Odds Favor the Bulls

No strategy is risk-free. Economic downturns could crimp client spending, and regulatory hurdles—including a ban on share buybacks until capital approval—are headwinds. However, Julius Baer's track record of overdelivering on cost targets and its early achievement of financial milestones suggest management can navigate these challenges.

Conclusion: A Compelling Contrarian Bet

Julius Baer's moves directly address its core weaknesses: bloated costs, inefficient markets, and regulatory risks. With a leaner cost structure, a focus on high-margin clients, and a disciplined risk culture, the bank is now positioned to outperform peers. At its current valuation, it offers a compelling contrarian opportunity—a chance to buy a Swiss wealth management leader at a discount, just as it turns the corner.

The numbers don't lie: Julius Baer's strategy is underpinned by execution and ambition. For investors with a medium-term horizon, this could be a rare chance to buy a turnaround story in a sector where most players trade at premiums. The time to act is now.