Switzerland's financial regulator has ended enforcement proceedings against Julius Baer over its exposure to the collapsed Austrian property group Signa. The decision removes a major regulatory hurdle and sent the bank's shares to a record high. Finma found serious violations of supervisory provisions around risk management and anti-money laundering rules.

However, the regulator concluded Julius Baer had already taken measures to address the identified shortcomings and improve its culture. The decision marks a significant milestone for chief executive Stefan Bollinger's attempt to rehabilitate Julius Baer following governance failures. Bollinger, who joined from Goldman Sachs at the beginning of last year after the bank wrote down its entire SFr606mn ($726mn) exposure to René Benko's Signa, has overhauled management, cut costs and wound down its private debt business.

Julius Baer said it had applied for permission to resume share buybacks, helping to send its share price more than 8 per cent higher in early trading in Zurich. Finma said it would still require Julius Baer to have SFr250mn in additional capital requirements until it completed a divestment of client assets. The regulator will also require the bank to file reports until 2032 detailing its risk, error and compliance culture, while confiscating SFr10mn of profits generated in violation of supervisory provisions relating to two politically exposed Russian client groups.