800 jobs could go as part of rationalizing costs
ZURICH, SWITZERLAND – Bank Julius Baer outlined for investors in London Tuesday 9 October details of its complex acquisition in August of Bank of America Merrill Lynch’s wealth management business outside Japan and the US.
The deal was said by the bank in August to be costing it nearly CHF1.47 billion in total, with more than half of that the cost of buying up to CHF72 billion in client assets. Julius Baer expects 80 percent of these assets to be moved by the end of 2013.
The deal, spun out over the next few months, is expected to boost considerably the bank’s assets under management (AuM). “Assuming CHF 72bn AuM are transferred, Julius Baer’s pro forma total client assets would increase to CHF 341bn of which CHF 251bn will be recorded as AuM.” It would be well ahead of Pictet, with just under half the AuM of Credit Suissse, which lags just behind UBS.
By August 2012 Julius Baer Group’s assets under management increased to a new record high of CHF184 billion, an increase of CHF14 billion or 8 percent since the end of 2011, the bank said in a statement issued Tuesday. Total client assets grew to CHF276 billion, an increase of CHF18 billion, or 7 percent.
The bank and other large assets management groups including UBS, Credit Suisse and Pictet are scrambling to expand their non-US portfolios as US tax authorities go after offshore accounts.
Julius Baer is targeting a reduced staff base of 15-18 percent of the 5,700 employees from the combined businesses, working in over 50 locations, to cut costs.