Julius Baer to cut 1,000 jobs after Merrill deal
By Emma Thomasson
ZURICH (Reuters) - Swiss private bank Julius Baer BAER.VX will cut up to around 1,000 jobs as it seeks to rein in costs following its purchase of Bank of America Merrill Lynch's (BAC.N: Quote) international wealth management business.
Baer said it planned a "significant reduction" of Bank of America positions not required after the merger as well as cuts to middle and back office functions of the melded group, reducing the combined staff of about 5,700 by 15-18 percent.
A Julius Baer spokesman said the job cuts would largely hit the Bank of America unit, which has 2,100 staff now, and they would be spread geographically and take place gradually after the deal closes, currently expected for the first quarter of 2013.
Baer said in August it was acquiring Merrill Lynch's wealth management business outside of the United States and Japan to expand in fast-growing emerging markets. It is presenting details of the deal to analysts and investors in London later on Tuesday.
Ahead of that meeting, Baer reported that its assets under management (AuM) rose to 184 billion Swiss francs ($197.11 billion) at the end of August from 179 billion at end June.
The bank said the increase resulted from net new money inflows close to the top end of its medium term target range, a positive market performance and a positive currency impact, mainly due to the strengthening of the dollar.
The gross margin was slightly lower than the 98 basis points reported for the first six months and the cost income ratio slightly higher due to a small contraction in client activity over the summer.
Baer said the business it is acquiring made a loss of $30.4 million in the first half but would have been profitable when adjusted for cost reductions expected to result from the merger. Continued...