Julius Bär, a Swiss private bank, is experiencing a decline in its stock value, which is causing concern among investors. The bank’s involvement in risky loans, particularly a CHF 606 million loan to a European conglomerate, has raised eyebrows. Experts believe that the stock’s continuous decline reflects the shock investors felt when they learned that the conservative bank had engaged in such risky ventures.

The potential impact of the loan on Julius Bär’s capital is evident when comparing the outstanding total exposure to the bank’s core capital (CET1). If the CHF 606 million were written off, the bank’s core capital, currently at CHF 3.3 billion, would be reduced by approximately 18 percent. This would be a significant decrease, highlighting the riskiness of the situation.

While the bank is not currently facing an existential threat, the ongoing decline in its stock value serves as an indicator of the predicament it finds itself in. The situation is further complicated by the fact that the stock’s downward trend could attract speculators who may engage in short selling, potentially driving the bank’s market value even lower. Hedge funds have reportedly shown interest in Julius Bär, adding to the complexity of the situation.

This News Article was automatically generated by Bob the Bot (AI)

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