UPDATE: Julius Baer Eyes Takeovers To Grow Private Bank

Julius Baer Holding AG (BAER.VX), which is splitting its private bank from its asset management arm, Friday said it will grow its business through acquisitions as it gave new financial goals for the two units that will be separately listed on the Swiss stock exchange.

The private banking market is experiencing increasing mergers & acquisitions activity as many banks are looking to dispose of non-core assets to free up capital and replenish their balance sheets, Chief Executive Boris Collardi said.

Julius Baer with its strong and liquid balance sheet is in a good position to make deals, and is considering takeovers in Switzerland and abroad, Collardi added.

The new private bank will be called Julius Baer Group.

Collardi didn't say if Julius Baer was still considering buying ING Groep NV's (ING) private banking assets. A person familiar with the situation said earlier this week that the Swiss bank is no longer after ING's private banking assets in Asia, but is still in the running for its European assets.

Among its new targets, the private bank aims to attract 4% to 6% in net new money each year - a goal that was deemed modest by analysts. Bigger Swiss rival Credit Suisse (CS) said earlier this week that it wants to attract 6% in new funds from clients each year.

On June 30, assets under management amounted to 142 billion Swiss francs ($138 billion), while total client assets were CHF210 billion.

In May, the Zurich-based bank disclosed its plan to separate its private banking and its asset management businesses into two independent companies, which will be individually listed on the Swiss stock exchange, starting Oct. 1.

The establishment of a pure-play private bank comes at a time when the prospects for offshore banking - the management of funds for clients who reside in a different country than the bank - are shrinking due to regulatory pressures.

Julius Baer is better positioned than its many privately held rivals to do business in an environment where Swiss private banks have to offer more than secrecy to attract clients, analysts say.

The bank has built a big presence in Asia, where economic growth is leading to the emergence of a new class of super-rich individuals who are seeking banking advice to manage their wealth. It also set up branches in Germany and Italy to be closer to clients, and to retain those who decide to move their wealth back to the countries they live in.

Julius Baer shares closed at CHF55.25 Thursday. The stock has gained 43% in value so far this year, underperforming the European banking sector, which is up 57% in the year to date.

Company Web site: http://www.juliusbaer.com

-By Anita Greil and Goran Mijuk, Dow Jones Newswires; [phone] ; [e-mail]