☰

Empresas y finanzas

Julius Baer to buy Merrill Lynch private bank


    ZURICH, Aug 13 - Swiss private bank Julius Baer said on Monday it will acquire Bank of America Merrill Lynch's private bank outside the U.S. for 1.47 billion Swiss francs ($1.5 billion), bumping up its assets by 40 percent.

    Baer, which is Switzerland's third-biggest listed private bank, said the deal would be accretive to earnings from the third full year following closing. Restructuring, integration and retention costs are expected to total around 400 million francs, the bank said.

    The bank has made no secret of its intent to make acquisitions and this is Baer's biggest merger since it bought Ehinger Armand von Ernst, Ferrier Lullin & Cie, BDL Banco di Lugano and asset manager GAM from UBS in 2005.

    It dwarfs the 520 million franc buy of troubled ING's Swiss private banking unit in 2009, when Baer paid some 2.3 percent for the assets.

    From 2015, Julius Baer targets net new money of up to 6 percent, a cost-income ratio of between 65 percent and 70 percent, and a pretax profit margin of up to 35 basis points.

    Baer has been making efforts to ensure that Merrill's most productive advisers stick around after a deal. The Swiss bank's executives in recent weeks conducted a "road show" in Panama and other Latin American markets, touting the advantages of the combination, one broker recruiter told Reuters late last week.

    Baer is expected to continue paying Merrill's brokers using the "grid" compensation system common in the United States. European wealth managers pay advisers a salary plus bonus. Brokers in the U.S. receive no salary, but can earn more money than their European counterparts, because they keep 35 percent to 40 percent of their commissions and fees.

    ($1 = 0.9752 Swiss francs)

    (Reporting by Katharina Bart and Martin de Sa'Pinto; Editing by Greg Mahlich)