What Changed
- FINMA combined enforcement actions from 2024 and 2025 into a single decision against Julius Bär.
- FINMA ordered the confiscation of CHF 10 million in profits, CHF 250 million in additional capital requirements, dividend approval controls, and reporting through 2032.
- FINMA opened individual enforcement proceedings against three former Julius Bär employees.
The Swiss Financial Market Supervisory Authority (FINMA) has concluded an enforcement proceeding against private bank Julius Bär, marking the fifth proceeding concluded against the institution in less than ten years. The decision combines two enforcement proceedings initiated in December 2024 and August 2025 concerning serious shortcomings in credit risk management, anti-money laundering (AML) controls, and organizational risk culture.
In credit risk management, FINMA found severe deficiencies stemming from Julius Bär's private debt business launched in 2018, where loans were secured by unlisted shares. From September 2019, the bank granted eight loans to a European corporate group and its founder, with aggregate credit exposure exceeding CHF 1 billion in 2022 and 2023. FINMA determined that the bank lacked necessary organizational structures, adequate staffing, internal regulations, and control mechanisms. Julius Bär ignored warning signs, breached self-imposed single-debtor limits, violated regulatory concentration risk reporting rules, and facilitated opaque equity transactions, including a EUR 60 million pass-through transaction. An outstanding exposure of CHF 586 million at the end of 2023 ultimately had to be written down in full.
Regarding AML obligations, FINMA identified multi-year failures to verify asset origins for clients linked to two Russian politically exposed persons (PEPs). The bank breached Anti-Money Laundering Act reporting requirements and bypassed standard due diligence by adopting a "Know Your Client Exception to Policy" (KYC-EtP) in 2019 based on an endorsement from an employee with close personal ties to the PEP client's family.
Following corporate governance overhauls and business restructuring by new management, FINMA relaxed certain immediate capital, liquidity, and lending restrictions. However, to ensure sustainable compliance, FINMA ordered the following binding measures:
- Submission of compliance and risk culture reports to FINMA through 2032.
- Maintenance of CHF 250 million in additional capital until the divestment of non-compliant high-risk PEP client assets is complete.
- Prior FINMA approval for shareholder payments, including dividends.
- Confiscation of approximately CHF 10 million in illicitly generated profits.
FINMA noted that the ruling is not yet legally binding and confirmed separate enforcement proceedings against three former Julius Bär employees.
Who May Be Affected
Wealth management institutions, financial compliance professionals, Swiss private banks, Julius Bär management, shareholders, and international PEP client relationships.
Cross-Border Context
The case involves cross-border credit facilities granted to a European corporate group and anti-money laundering oversight concerning Russian politically exposed persons (PEPs).
What to check next
- Monitor whether Julius Bär or affected parties appeal FINMA's ruling before it becomes legally binding.
- Track the progress and outcomes of FINMA's enforcement proceedings against the three former employees.
This article provides general information and does not constitute legal advice. Consult the official text and obtain advice appropriate to your circumstances where needed.
Prepared automatically with AI assistance from the official sources linked on this page. Translations and explanations do not replace the official text.