Profits drop at Swiss bank Julius Bär

Swiss private bank Julius Bär posted a 26.8-percent fall in full year profits on Monday despite healthy cash inflows from emerging markets.

Net profit at the bank, which specialises in wealth management, fell to 258.1 million francs ($279 million) and profit before taxes dropped 26.6 percent to 318.8 million, it said in a statement.

Bär cited the impact of the strong franc and an exceptional charge of 50 million francs related to the bank’s move to axe 150 posts, announced in November last year.

The bank also had to pay a one-off sum of 50 million euros to German authorities to close a tax evasion probe.

Net inflows for 2011 grew 15.9 percent to 10.2 billion francs, mainly from Asia, Russia, Eastern Europe and Latin America.

The group’s local business in Switzerland and Germany also delivered “significant” inflows, the bank said.

“We were able to maintain our groups business momentum in most dimensions in 2011 despite a challenging market and business environment,” said chief executive Boris Collardi in a statement.

Bär said it would “continue to cooperate fully” with authorities in the United States who are investigating banks suspected of helping American clients avoid paying tax.

“Julius Bär is strongly committed to resolving this situation and is confident that a mutually satisfactory solution will be found,” the group said.

The bank will offer its shareholders a total dividend of one franc per share and launch a new share buyback programme with a maximum value of 500 million francs to be carried out over two years.

Its share price was down 4.4 percent to 36.16 francs towards 1030 GMT.


Swiss bank exec pleads guilty in $1.2 bn Venezuelan laundering scam

A former Swiss bank manager pleaded guilty in a US court on Wednesday for his role in a $1.2 billion money laundering scheme involving Venezuelan state oil company PDVSA, the Justice Department announced.

Swiss bank exec pleads guilty in $1.2 bn Venezuelan laundering scam
Matthias Krull is a former employee of Swiss private bank Julius Bär. File photo: AFP

Matthias Krull, 44, a German national and Panamanian resident, was one of a ring of conspirators and he admitted the scam began in late 2014 with “a currency exchange scheme that was designed to embezzle around $600 million from PDVSA,” the Justice Department said in a statement.

PDVSA was the crown jewel of Venezuela's imploding economy and remains virtually the only source of hard currency for the embattled government. But it also has made the company a target of theft and graft.

The Justice Department said the stolen fund were “obtained through bribery and fraud.”

The conspiracy in 201 doubled to $1.2 billion in funds embezzled from PDVSA. Krull, at the time a banker with Switzerland's Julius Bär private bank, became involved in 2016 when another member of the ring asked him to help launder the proceeds. 

They used Florida real estate and “sophisticated false-investment schemes to conceal that the $1.2 billion was in fact embezzled from PDVSA,” the statement said.

He pleaded guilty in a Florida court to conspiracy to commit money laundering. He is scheduled to be sentenced October 29th.

Krull's co-conspirators “include former PDVSA officials, professional third-party money launderers, and members of the Venezuelan elite, sometimes known as 'boliburgues.'”

US authorities arrested Krull in Miami last month, while Gustavo Hernandez Frieri, a Colombian, was arrested in Italy and is awaiting extradition.

The Venezuelans indicted in the case are Francisco Convit, shareholder of energy company Derwick Associates; Carmelo Urdaneta, former petroleum and mining ministry legal advisor; Abraham Ortega, ex-PDVSA staffer; and Jose Vicente “Chente” Amparan, a businessman and “professional money launderer” with links to Spain and Malta.

Venezuela's economic freefall continues, with hyperinflation expected to soar to one million percent, according to the International Monetary Fund.

On Tuesday, President Nicolas Maduro introduced a new currency, dropping five zeros and devaluing the “sovereign bolivars” by 96 percent.