UPDATE: Julius Baer Eyes Takeovers To Grow Private Bank
September 25 2009 - 3:06AM
Dow Jones News
Julius Baer Holding AG (BAER.VX), which is splitting its private
bank from its asset management arm, Friday said it will grow its
business through acquisitions as it gave new financial goals for
the two units that will be separately listed on the Swiss stock
exchange.
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.
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 new private bank will be called Julius Baer Group.
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.
In May, the Zurich-based bank disclosed its plan to separate its
private banking and its asset management businesses into two
independent companies, which will be individually listed on the
Swiss stock exchange, starting Oct. 1.
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.
Julius Baer shares closed at CHF55.25 Thursday. The stock has
gained 43% in value so far this year, underperforming the European
banking sector, which is up 57% in the year to date.
Company Web site: http://www.juliusbaer.com
-By Anita Greil and Goran Mijuk, Dow Jones Newswires; +1 43 443
8044 ; anita.greil@dowjones.com