Julius Baer forms link with Bank of China

JULIUS BAER, Switzerland’s largest “pure play” private bank, has announced a strategic partnership with Bank of China as it seeks to improve its access to Asia’s rapidly growing population of wealthy individuals.

Under the agreement, BOC will refer Chinese clients with international banking needs to Julius Baer, while the Swiss bank will refer customers with Chinese needs to BOC. In addition, the Swiss assets of BOC will be integrated into Julius Baer.

Boris Collardi, chief executive of Julius Baer, declined to give financial details of the deal, but said that BOC’s Swiss arm had less than SFr1 billion-worth of assets under management.

He noted that the deal had “the potential for Julius Baer to gain further access to Chinese mainland”, where a sustained economic boom has been accompanied by significant wealth creation.

Julius Baer calculates that Asia Pacific is home to more high-net-worth individuals than any other region in the world, and expects the number to more than double from 1.16 million in 2011 to 2.82 million by 2015.

Mr Collardi said he expected emerging markets, which account for about a third of the company’s assets under management, to make up more than half by 2015.

In the first six months of 2012, the group attracted SFr5.5 billion of net new money, and while all regions had net inflows, the majority came from emerging markets, according to Dieter Enkelmann, the group’s chief financial officer.

Combined with a positive performance by the assets already under management and helpful currency effects, this helped swell the Swiss group’s assets under management to SFr179 billion, up from SFr170 billion at the end of 2011. partnership

Net profits rose 19 per cent year on year to SFr175.7 million – mainly because Julius Baer paid a fine of €50 million in the first half of 2011 to settle a German investigation into offshore Swiss accounts used by rich Germans to evade taxes.

On an underlying basis, profits were down 11 per cent, as the uncertain macroeconomic environment made the Swiss bank’s clients trade less, which in turn cut commission fees. – (Copyright the Financial Times Limited 2012)