Julius Baer knocked by Merrill integration
WEALTH management company Julius Baer fell nearly six per cent in trading yesterday as its integration of funds from Merrill Lynch’s wealth business continued to pose problems.
The firm, which bought Merrill Lynch International Wealth Management from Bank of America in August 2012, said net profit for the full year fell 30 per cent to 188m Swiss francs due to ongoing restructuring costs related to the acquisition.
The deal helped to boost Baer’s assets under management – rising 35 per cent from 249bn Swiss francs to 254bn Swiss francs – but adjusted operating expenses also rose 29 per cent, most of it related to the Merrill buy.
And the group delivered more bad news by saying it expected less of Merrill’s assets to transfer across than it originally thought, due to clients pulling cash.
It said by early 2015 the amount of cash transferred across will be at the lower tend of its 57bn Swiss francs to 72bn Swiss francs range.
Chief executive officer Boris Collardi put a brave face on it.
“In 2014, our focus will shift to improving the cost efficiency of the rapidly grown business, while not losing sight of our ambition to continuously deliver top-quality advice and services to our growing international base of sophisticated clients,” he said.
The firm said the total number of workers grew by 1,669 to 5,390, up 45 per cent. The group intends to cut about 1,000 positions across the business as part of the integration to help save costs.