The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Julius Baer springs surprise

Chairman Raymond Baer describes Julius Baer's deal as truly transformational. A rising stock price suggests investors agree. Analysts identify the private bank, after the purchase of SBC Wealth Management, as the outstanding restructuring story in European banking. But this deal wasn't what the market expected.

THE MARKETS HAD been expecting a takeover of Julius Baer since January this year, when the Swiss private bank confirmed a new single-share structure. Based on one share, one vote, this cut the voting power of the shareholder block led by the Baer family to 18% from the 52% it had previously exercised.

Family disagreements became public at the time: head of private baranking Michael Baer left amid differences of opinion about strategy. In spite of the bank's reasonable performance, private-banking clients had been pulling their money out at a steady clip for the previous 18 months: analysts estimate SFr1.1 billion ($870 million) was withdrawn in 2004 and SFr500 million in the first half of this year.

The bank had been forced to give up on its efforts to expand private banking in the US, where it suffered from a perceived lack of products, selling out to UBS at the end of 2004. It found itself struggling with increasing compliance expenses, consequent margin pressures, and a lack of scale over which to spread the cost of its new IT system, Avaloq, and future investment in emerging markets offering better growth. Julius Baer looked overly dependent on its asset management division, particularly the small and very well-paid team in New York, running its highly successful international equity fund.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree