2nd UPDATE: Julius Baer Eyes Takeovers To Grow Private Bank
25 Setembro 2009 - 7:07AM
Dow Jones News
Julius Baer Group Ltd., the new Swiss private bank being created
by splitting its namesake parent, said Friday it plans to expand
its business through acquisitions.
The private banking market is experiencing increasing mergers
& acquisitions activity as many banks are looking to dispose of
non-core assets to free up capital and replenish their balance
sheets, Chief Executive Boris Collardi said in a summary of a
presentation to investors.
Julius Baer with its strong and liquid balance sheet is in a
good position to make deals, and is considering takeovers in
Switzerland and abroad, Collardi added.
The establishment of a pure-play private bank comes at a time
when the prospects for offshore banking - the management of funds
for clients who reside in a different country than the bank - are
shrinking due to regulatory pressures.
Julius Baer is better positioned than its many privately-held
rivals to do business in an environment where Swiss private banks
have to offer more than secrecy to attract clients, analysts
say.
The bank has built a big presence in Asia, where economic growth
is leading to the emergence of a new class of super-rich
individuals who are seeking banking advice to manage their wealth.
It also set up branches in Germany and Italy to be closer to
clients, and to retain those who decide to move their wealth back
to the countries they live in.
The Zurich-based bank also wants to hire more client advisors to
fuel growth. It is considering hiring up to 50 new bankers a year.
On June 30, it had 636 client advisors.
Collardi didn't say if Julius Baer was still considering buying
ING Groep NV's (ING) private banking assets. A person familiar with
the situation said earlier this week that the Swiss bank is no
longer after ING's private banking assets in Asia, but is still in
the running for its European assets.
Among its new targets, the private bank aims to attract 4% to 6%
in net new money each year - a goal that was deemed modest by
analysts. Bigger Swiss rival Credit Suisse (CS) said earlier this
week that it wants to attract 6% in new funds from clients each
year.
On June 30, assets under management amounted to 142 billion
Swiss francs ($138 billion), while total client assets were CHF210
billion. It reported a pro forma net profit of CHF246 million.
Julius Baer Holding AG (BAER.VX) had disclosed its plan to
separate the private banking and asset management businesses into
two independent companies in May. The two companies will be
individually listed on the Swiss stock exchange, starting Oct.
1.
The private bank will have a Tier 1 ratio - a measure of balance
sheet strength - of 19%, once $300 million in proceeds from the
recent initial public offering of U.S. fund manager Artio Global
Investors (ART) is recorded. That is above the bank's 12% target,
but Baer wants to keep the excess for the time being - saying it
doesn't plan share buybacks - to be able to finance acquisitions if
opportunities arise.
Julius Baer shares fell on disappointment about the private
bank's modest targets.
At 0920 GMT, they were down CHF2.85, or 5.2%, at CHF52.40, in a
lower Swiss market. The stock has gained 31% in value so far this
year, underperforming the European banking sector, which is up 54%
in the year to date.
Company Web site: http://www.juliusbaer.com
-By Anita Greil, Dow Jones Newswires; +41 43 443 8044;
anita.greil@dowjones.com