Julius Baer is looking at deal opportunities after taking on 59 billion Swiss francs in assets from its purchase of Merrill Lynch’s international arm, CEO Boris Collardi said.
The Swiss private bank, which has been a prolific dealmaker in past years, plans to return to growth by acquisition following a pending settlement over tax evasion with U.S. justice authorities.
«There is no reason this (Swiss private banking consolidation) won’t continue: the revenue side is challenging and the cost side is structurally increasing,» CEO Boris Collardi said on Monday at a media and analyst briefing on full-year results.
Dealmaking as a Way Into New Markets
Collardi said the conclusion last week of a long-running U.S. investigation into how banks in Switzerland helped wealthy Americans evade taxes could provide renewed impetus to Swiss bank sale talks. «I think the thing that gave a bit of pause was the U.S. investigation, but as we see with the Category 2 banks now over, should they want to pursue a transaction, they are now free to do so.»
Collardi said Baer would also use dealmaking as a way to enter new markets, such as its purchase of a minority stake last year in NSC Asesores, a financial advisory firm in Mexico.
Drive to Cut Costs
finews.asia reported last week that Singaporean DBS Bank and Swiss private bank EFG International are among those interested in acquiring Barclays private-banking business in Asia, which new Chief Executive Jes Staley has put up for disposal as part of a drive to cut costs and improve profitability.
Collardi did not mention specific names or targets.
Banks Not Doing Well
He also referred to «big elephants», or large international banks with Swiss banking arms. «There is a cluster of large banks not doing very well and some are in wealth management,» but the private banking arms aren’t significant to the overall bank nor will they bolster its capital position, which is likely to lead to strategic reviews and disposal plans, Collardi said. «Who knows, reactively, maybe something will come on the table in the period we described.»
Several prominent Swiss banking deals have resulted from foreign banks exiting the market. Last year, bank Standard Chartered said it would shut its Swiss private bank after it couldn’t find a buyer for the unit.