Finance

Lionel Laurent is a Bloomberg Gadfly columnist covering finance and markets. He previously worked at Reuters and Forbes.

Swiss private bank Julius Baer Group Ltd. has lost CEO Boris Collardi to rival Pictet Group. Bad news for Baer this may be, but after a near-nine-year stint as CEO in a hotly competitive market, his move should have been as straightforward to prepare for as the chime of a Swiss clock.

The fall in Julius Baer's stock price, though, points to a firm caught unaware. Baer appears to have fallen short in communicating its succession plans to the market or in having them ready in the first place. The stock fell the most on Monday since June 2016 -- which only serves to highlight Collardi's impressive track record: He has presided over a near-50 percent gain since 2009.

Collardi Climb
Baer shares are up almost 50 percent under his tenure
Source: Bloomberg

Obviously, losing Collardi is a net negative for Baer. He is taking a wealth of experience and inside knowledge to a rival. Loyal lieutenants and relationship managers may follow him. He has overseen the bank's big strategic moves since the financial crisis, from splitting off asset manager GAM Holding to piling into Asia, an Eldorado for bankers hunting the mega-rich.

These CEOs Have Stuck Around
Top 10 European banks by CEO tenure
Source: Bloomberg

But his departure was foreseeable. Collardi was among the top 10 longest-serving bank CEOs in Europe, and had served more than the average of five years. Wealth management is a very competitive market in terms of talent, as Baer itself would no doubt know, having embarked on a hiring spree and swelled its ranks at the expense of rivals. And, irony of ironies, Collardi's own resume shows a propensity to stay within the Toblerone Triangle of Swiss finance: He joined Baer in 2006 after 12 years at Credit Suisse.

In the bank's defense, the nomination in September of Baer lifer Bernhard Hodler as deputy CEO was a preparation of sorts. Maybe there was no time to attempt to engage with Collardi and retain him -- Baer's management said he resigned over the weekend.

But the abruptness of his departure, and the fact that Baer seems to be only at the beginning of a process to find a "long-term" leader, points to a firm caught on the back foot. Interim leader Hodler will turn 58 next year. Despite his promise of "continuity" and "stability," he doesn't seem to be touted as a permanent successor. There are now fresh gaps in the executive bench: New hire Oliver Bartholet will not take up his chief risk officer role until April. Investors are selling rather than sticking around to see if the search is a smooth one.

None of this necessarily means long-term damage to the Julius Baer franchise. It has recently delivered impressive growth in net inflows, while gross margin has held up well in the face of tough competition and low benchmark interest rates. But with so much poaching going on, and with recent hires clearly revving up a lot of new growth, there's clearly a feeling that the loss of a leader could presage a domino effect through the organization.

It will be up to Baer to prove otherwise.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Lionel Laurent in London at llaurent2@bloomberg.net

To contact the editor responsible for this story:
Edward Evans at eevans3@bloomberg.net