In July, Julius Bär reported its half-year results, revealing a 35% drop in profit for the first six months of 2024 to 295 million Swiss francs. The decline was driven largely by high credit impairments totaling 130 million francs — a sharp increase from just 7 million a year earlier — and the sale of the bank’s Brazil unit.

Back in May, the Zurich-based private bank had already disclosed an increase in non-performing loans in a statement covering the first four months of 2025, and announced related personnel measures, according to finews.ch. However, the bank, which is primarily active in wealth management, did not disclose which specific positions were affected by the write-downs at the time.

Main Lender to Degag Among Banks

In its report, the bank stated that it had applied «more cautious criteria regarding credit quality and the appropriateness (or extent) of the wealth management relationship». This development led to higher impairments on «selected positions in its mortgage portfolio and in the remaining private debt book.»

The German business daily «Handelsblatt» has now shed new light on the matter. Its research showed that Bank Julius Bär, including its German subsidiary, was the main lender among banks to the German real estate group Degag. According to a preliminary (unpublished) report by the insolvency administrator, the bank (Swiss head office and German unit) filed claims amounting to 48 million euros.

In total, the bank is said to have granted credit lines exceeding 100 million euros to several companies within the Degag Group, according to «Handelsblatt».

Heavily Overindebted Real Estate Group

The German real estate group had already collapsed in 2024. According to the insolvency administrator, its over-indebtedness amounts to up to 1.1 billion euros. Degag’s business model consisted of buying apartment blocks, renovating them, and reselling them, financed by investors and banks.

When asked by finews.ch, Julius Bär confirmed that it had granted a «high double-digit million amount in Swiss frans in mortgage loans» to a private business group to finance residential properties in Germany, and that «some borrowers of this group are currently experiencing financial difficulties».

Julius Baer had already been hit hard by the collapse of the Austrian real estate group Signa, owned by René Benko, in 2023, forcing the bank to write down a total of 586 million francs in connection with the case.