The Swiss Financial Market Supervisory Authority (FINMA) announced in a press release dated 29 September 2026 that it had concluded enforcement proceedings against Julius Bär. They concerned private debt loans granted to a European group and client relationships involving two Russian politically exposed persons (PEPs). According to FINMA, the bank seriously breached supervisory law, in particular the requirements for appropriate risk management and its statutory anti-money laundering obligations. The ruling is not yet legally binding.
Two proceedings combined
A first proceeding was opened in December 2024 over several loans granted to various entities of a European group and to its founder, neither of whom was named. In June and December 2023 and again in May 2024, FINMA had already imposed extensive immediate measures, notably over weaknesses in lending practices and in the fight against money laundering.
In August 2025, a second proceeding targeted possible breaches of anti-money laundering rules concerning clients linked to two Russian PEPs, with immediate measures in September 2025. As both cases touched on the bank's risk management and culture, FINMA combined them. According to FINMA, it is the fifth proceeding it has concluded against the institution in less than ten years.
The private debt loans
According to FINMA, Julius Bär built up a private debt business from 2018 onwards, whose loans were generally secured not by traditional collateral but by unlisted shares of the borrowers. From September 2019, the bank granted eight loans to the European group and its founder, totalling more than CHF 1 billion in 2022 and 2023. Among other things, the authority cites:
- an inadequate organisation and staffing: for a long time, internal regulations, effective controls and trained staff were lacking;
- a business alien to the strategy of a bank specialising exclusively in private banking;
- numerous warning signs ignored, per-borrower limits the bank had set itself constantly exceeded, and reporting requirements for concentration risks breached;
- conflicts of interest and inappropriate incentives, with employees and external intermediaries having received salaries and commissions running into the millions.
According to FINMA, the bank also facilitated opaque transactions in the group's securities and, in return, induced the group to carry out a pass-through transaction of EUR 60 million. At the end of 2022, its loan portfolio therefore did not reflect economic reality. The CHF 586 million exposure outstanding at the end of 2023 had to be written off in full.
The relationships with two Russian PEPs
According to FINMA, despite the high risk these clients posed, the bank failed for several years to adequately verify the origin of the assets or to examine negative press reports and suspicious behaviour with sufficient rigour. It also breached its reporting obligations under the Anti-Money Laundering Act.
In 2019, the bank made an exception to its rules (“Know Your Client Exception to Policy”, KYC-EtP), relying on one of its employees' support for the PEP client. It did not question this exception in subsequent reviews, even though that employee had close personal ties with the client's family.
The measures
The bank has already acted: in 2025, at FINMA's request, it redefined its risk appetite and decided to gradually part with clients and assets that had become incompatible with it. It has exited private debt, reduced its lending, strengthened its controls, revised its remuneration and launched a cultural transformation. The authority also acknowledges changes to the board of directors and executive management over the past two years; the current leadership team was appointed after the events.
Some immediate measures have therefore been lifted or eased, notably on capital and liquidity, lending and new relationships with PEPs from high-risk countries. The press release also mentions:
- reports to be submitted to FINMA until 2032 on the risk, error and compliance culture;
- the gradual lifting of the ban, imposed in September 2025, on entering into new relationships with PEP clients from high-risk countries, until the divestment of the assets concerned is complete;
- until then, additional capital of CHF 250 million, an amount that was at times higher during the proceedings;
- FINMA's prior approval of payouts to shareholders, such as dividends;
- the confiscation of profits of around CHF 10 million made, according to the authority, in breach of supervisory law with the two client groups linked to the Russian PEPs.
FINMA has also opened proceedings against three former employees who may be responsible for breaches.
What this says about supervision
Since 2017, FINMA has found serious breaches in five proceedings against Julius Bär. Despite partly similar shortcomings and targeted measures, the bank has not, in FINMA's view, brought about the necessary change in its risk and compliance culture. One possible reading is that the authority is betting here on long-term monitoring, with reports required until 2032. The source says nothing about other Swiss banks.
