The Swiss aim to become number one in global private banking, and today they have achieved one last conquest. Zurich-based bank Julius Bär has announced it will buy Merrill Lynch's wealth management business (excluding those in the US and Japan) from Bank of America for around 860 million Swiss francs. approximately 715 million euros. The acquisition will take place in assets under management for 30 June 2012 and will concern over 2 collaborators and more than 500 financial advisors. More than half of the assets belong to customers domiciled in emerging markets, especially in Asia, Latin America and the Middle East.
According to Julius Bär's estimates, the acquisition is expected to increase assets under management by between 57 and 72 billion francs within two years. The agreed price is equivalent to 1,2% of the transferred assets under management, ie between 680 and 860 million francs. To these will be added 300 million related to risk capital requirements and 400 million related to restructuring costs. Upon completion of the transfer, the transaction will increase Julius Bär's current assets under management by 40% to CHF 251 billion and bring total client assets to CHF 341 billion at the end of the two-year integration period, with representation of the Swiss group in more than 25 countries.
The acquisition is expected to lead to increased earnings starting from the third full year after the main stipulation, i.e. in the first stable year after the integration: EPS increase target for 2015 is approximately 15%. If the integration is completed in Q2014 2015 as planned, for 4 Julius Bär expects the enlarged group to post net new money inflows of 6-65%, cost/income ratio 70-30% and pre-tax profit margin 35-1bp. The target for the 12% BIS Tier XNUMX ratio remains unchanged.
“This acquisition allows us to take another significant step forward in our growth strategy,” he said Boris FJ Collardi, CEO of Julius Bär Group, "and of significantly strengthen our position as a leader in global private banking adding a new dimension not only to growing markets, but also in Europe”.
