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JULIUS BAER

Julius Bär hands 2,500 names to US: report

Swiss private bank Julius Bär handed over to US authorities information on 2,500 of its employees as part of Washington's efforts to clamp down on tax evasion, a newspaper reported on Friday.

Julius Bär hands 2,500 names to US: report
Sporst (File)

The Zurich-based bank is believed to be the latest to bend to Washington’s demands to release names of staff who could have helped clients avoid paying tax in the United States, Le Temps newspaper said.

In addition to providing personal information about staff to the US tax authorities, Baer is said to have made available personal documents, emails and details of telephone calls.

The data concerns current and former staff, as well as outside contractors, the report added.

It cites as its source lawyer Douglas Hornung, the legal representative of a former HSBC executive whose name was one of more than 1,000 given to the US tax office.

Referring to “three different sources” in his open letter to Swiss president Eveline Widmer-Schlumpf, Hornung writes that Bär “gave more than 2,500 dossiers to the US, and that HSBC had handed over approximately 1,100”, violating Switzerland’s federal law on data protection.

That brings the total number of names handed over by the 11 banks in Washington’s sights to 10,000, Hornung claims.

President Widmer-Schlumpf, who is also the country’s finance minister, recently announced that she hoped to come to a “global solution” on the issue “this year”.

The banks are: Credit Suisse, Julius Bär, Wegelin, Banque cantonale de Zurich (ZKB), la Banque cantonale de Bale (BKB), Neue Zürcher Bank (NZB), HSBC, LLB, in addition to the Israeli banks Leumi, Hapoalim and Mizrahi.

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JULIUS BAER

Julius Bär targets 1,000 job cuts after acquisition

Julius Bär, the Zurich-based private bank, is planning to slash its staff by as much 1,000 people in a bid to improve profitability.

Julius Bär targets 1,000 job cuts after acquisition
Photo: Sporst (File)

The bank announced the plan on Tuesday in the wake of its planned acquisition of Bank of America Merrill Lynch’s wealth management business outside the US and Japan.

The targeted reductions amount to between 15 and 18 percent of its workforce of around 5,700 people in more than 50 locations.

In August, when the deal was announced, Julius Bär said it expected to pay a total of about 1.47 billion francs ($1.57 billion), including integration costs, to acquire the wealth management business of the American bank.

The business involves managing more than 57 billion francs in assets from clients in Europe, Asia, Latin America and the Middle East.

Julius Bär, which describes itself as Switzerland’s leading private bank, said it expects the acquisition, which aims to tap into emerging markets, will boost earnings per share 15 percent by 2015, not including restructuring costs.

The bank said it planned "a significant reduction of former Bank of America corporate overhead and other allocations not required going forward in the Julius Bär structure."
 
It expects the deal to close in the first quarter next year.

About 80 percent of the total assets it is acquiring will be reported at Julius Bär by the end of 2013, the bank said.

It said it had managed to raise 250 million francs in non-core tier 1 capital in September to help finance the acquisition.
 
It is also planning a rights issue to help with the financing and said on Monday it expects to sell 20 million new shares to rake in around 492 million francs during the October 10th-16th operation.

The bank, specialized in wealth management, said it would present more details of the acquisition to analysts and investors in London later on Tuesday.

In its statement, Julius Bär said the planned job cuts and other cost-cutting measures were expected to lead to an implied cost-income ratio of about 70 percent and a pre-tax profit margin of around 25 basis points for the acquired business in 2015.

The Swiss bank also said it expected the deal to be at least earnings per share-neutral by 2014.

On a separate note, the company reported that the assets it currently has under management increased to a new record high of 184 billion francs, which is 14 billion francs, or eight percent higher than at the end of 2011.

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