Is the Swiss financial industry facing the next case of banking consolidation? Julius Baer is said to be in talks with EFG International. There is a certain logic behind this, finews.ch editor-in-chief Dominik Buholzer writes, and it is mainly about a personnel matter.

The rumor made its rounds over the weekend: Zurich-based Julius Baer is considering a takeover of its competitor EFG International, news agency «Bloomberg» (article subject to payment) reported, citing unnamed sources familiar with the matter.

There was no official statement. News agency «Reuters», in turn, reported that these takeover talks had been stopped.

Intensive CEO search fuels speculation

Speculation about a merger between Julius Baer and EFG International is not new. But this time it could be different.

Julius Baer is in a special situation. After the departure of CEO Philipp Rickenbacher last February, the bank is looking for a new CEO, and in this context, the CEO of EFG International, Giorgio Pradelli, is considered a promising candidate, finews.asia previously wrote in March.



Giorgio Pradelli, CEO of EFG International (Image: zvg)

The Italian Pradelli has been working for the private bank, which is majority-controlled by the Greek-Swiss Latsis family, for 12 years and has been its CEO since 2018. During this time, he gave the firm a clear strategy, which was crowned with success. Since 2022 alone, the price of EFG shares has risen by more than 60 percent.

Change Not Entirely Far-Fetched

No wonder, the name Pradelli is right at the top of Julius Baer's shortlist. There are more reasons for that. Pradelli knows the business in Asia well, where both EFG International and Julius Baer are highly active. And after six years as CEO at EFG, a job change could be an option.

The follow question is more pertinent. If Giorgio Pradelli moves, will he also bring EFG International along?

New Chapter after René Benko

There are various reasons for such a transaction. Both institutions have strengths and special competencies that would complement each other. EFG International, for example, has recently begun to focus very strongly on the ultra-high net worth business, which would ideally complement Julius Baer's wealth management business.

Julius Baer would not only strengthen its market position but also significantly diversify its customer base after the tiresome Signa debacle with Austrian entrepreneur and investor René Benko as well as strengthen its ambitions in growth markets such as the Middle East, Asia and Latin America.

Boris Collardi in the Background



EFG shareholder and board member Boris Collardi (Image: Keystone)

For the first four months of the current year, Julius Baer reported growth in assets under management and a better gross margin. But in terms of new money inflows, the bank continued to fall short of expectations.

Clarity by June at the Latest

Together with EFG International, this would look different. For the shareholders of EFG International, including the Latsis family and former Julius Baer CEO Boris Collardi, a transaction would be highly attractive at the current time. And it would allow them to monetize the share price increase in the last two years.

On Tuesday, EFG International will report its figures for the first quarter of 2024. And in June, Julius Baer wants to provide clarity on the CEO issue. By then, it will also be clear whether Pradelli will change offices.