Julius Bär links up with Bank of China

Julius Bär and the Bank of China will “mutually cross-refer” clients Reuters

Swiss private bank Julius Bär has agreed to a strategic partnership with the Bank of China (BOC) to refer clients to each other and undertake joint marketing activities. Julius Bär said it would also integrate the Bank of China (Suisse).

BOC, one of the big four state-owned commercial banks and the oldest bank in China, will refer clients with international private banking needs outside the Chinese mainland to Julius Bär, while clients of Julius Bär requiring banking services will be referred to BOC.

The two partners also expect to cooperate in product distribution, financial market research and joint initiatives including investment conferences.

In a statement on Monday, Julius Bär announced the banks would “mutually cross-refer” clients as well as undertake various joint marketing activities.

“The cooperation with Bank of China will lead Julius Bär to partner with one of the top players in the Chinese mainland and internationally,” said Boris Collardi, CEO of Julius Bär.

“In addition, in future the partnership offers the potential for Julius Bär to gain further access to the Chinese mainland, one of the world’s most important and fastest-growing wealth markets.”

Li Lihui, vice-chairman and president of Bank of China, added: “Our international private clients have become much more demanding in recent years. Julius Bär is for us an outstanding partner, our cooperation can better serve the needs of our clients with private banking requirements. The cooperation with Julius Bär instantly complements our existing private banking capabilities.”

Growth strategy

Also on Monday, Julius Bär announced its first-half figures for 2012.

Assets under management grew to SFr179 billion ($180.5 billion), an increase of five per cent since the end of 2011 and a record high for Julius Bär.

This increase was driven by strong net inflows of SFr5.5 billion (over six per cent annualised), as well as positive market performance and currency impacts. The new money came from growing markets in Asia and the Middle-East, but also from Julius Bär’s local private banking business in Germany

Total client assets rose by four per cent to SFr269 billion.

“Julius Bär’s growth strategy remained well on track in the first half of 2012 as evidenced by the strong net new money inflows,” Collardi said.

“At the same time, the ongoing economic and political uncertainty, dominated by the eurozone crisis, continued to frame the market environment. Against this background, our clients maintained their overall cautious investment stance leading to relatively restrained transaction and trading activity.”

The bank’s operating income fell 3.9 per cent to SFr863.1 million ($877.7 million) in the six months to June 30.

Cost cuts and the absence of big payments last year related to a tax dispute with Germany meant that expenses fell at an even steeper pace and allowed the bank to report a 19 per cent increase in net profit to SFr175.5 million.

History of Julius Bär

1890 Establishment of Hirschhorn & Grob partnership.

1896 Julius Bär becomes member of Hirschhorn & Grob. Bank changes name to Hirschhorn, Uhl & Baer.

1901 Julius Bär & Co established after death of Ludwig Hirschhorn.

1924 Bank purchases former premises of Swiss National Bank on Bahnhofstrasse in Zurich, which become its headquarters.

1940 First Julius Bär company established abroad with founding of Baer Custodian Corporation on Wall Street, New York.

1947 Hans J Bär joins the bank, becoming a partner in 1960, president of the executive board from 1975 until 1993 and then chairman until his retirement in 1996.

1974 Establishes business in the Cayman Islands.

1980 Bär Holding Ltd goes public with share issue.

1990-2011 Continues expansion through acquisitions and establishing banks in Russia, the Middle East and Asia.