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Julius Baer set aside nearly $ 80 million after reaching an agreement with the United States Department of Justice in relation to the regulator’s investigation into corruption at FIFA, the governing body of world football.
The Swiss private bank has tried to draw a line under its involvement in a series of international money laundering scandals, which would allow it to pursue transformative mergers and acquisitions as early as next year.
Julius Baer announced Monday that he has taken a $ 79.7 million provision to settle the DoJ’s investigation into his role in the Fifa deal, which also includes a three-year deferred power of attorney agreement. Shares of the lender rose just under 3% in morning trading.
Julius Baer’s involvement in the Fifa case and an alleged separate corruption case involving Petróleos de Venezuela (PDVSA), a state-owned oil and natural gas group, has led the Financial Markets Supervisory Authority, the Swiss regulator , to ban the bank from making large transactions in February.
Both Julius Baer’s chief executive Philipp Rickenbacher and its chairman Romeo Lacher have said in recent weeks that they hope Finma will lift its restrictions next year and the bank can pursue acquisitions.
“The deal with the US Department of Justice on the Fifa issue is the next step for Julius Baer to close the remaining regulatory and legal issues,” said Andreas Venditti, analyst at Vontobel. “Given President Lacher’s statements in the weekend press, Julius Baer is once again looking for merger and acquisition deals, perhaps large ones.”
The Fifa case relates to Jorge Luis Arzuaga, an Argentine who worked for Julius Baer, who pleaded guilty to federal court in Brooklyn, New York in 2017 for facilitating payments from a sports marketing company to FIFA officials.
The DoJ investigation came to a head in 2015 and led to the resignation of longtime FIFA president Sepp Blatter.
Julius Baer said he has partnered with the DoJ since 2015 and has already taken steps to reduce the risk of the business, including the reassessment of its customer relationships, which has led to the closure of some accounts. It also introduced a code of ethics and business conduct.
Last month the Financial Times revealed the bank was withholding millions of francs in bonuses from its former CEOs Boris Collardi and Bernhard Hodler in connection with the PDVSA case.
Separately, Julius Baer was ordered by Switzerland’s highest court in September to return 150 million francs ($ 160 million) that had been embezzled by a well-known East German agent following the collapse of the Berlin Wall.
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