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Julius Baer Group Ltd., the new Swiss private bank being created by splitting its namesake parent, said Friday it plans to expand its business through acquisitions.

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 in a summary of a presentation to investors.

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 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.

The Zurich-based bank also wants to hire more client advisors to fuel growth. It is considering hiring up to 50 new bankers a year. On June 30, it had 636 client advisors.

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.

"This target takes a realistic macro scenario into account, with still subdued growth in 2010," Collardi said. "And also an ongoing tax amnesty that is still ongoing in Italy," he added.

Italy recently launched its third tax amnesty in seven years. Tax dodgers who come clean must pay a penalty of 5% of the total they want to declare. Their identities remain secret. The seven-month amnesty comes just as private banks are scrambling to hold on to clients upset by deep losses in their portfolios.

On June 30, assets under management amounted to 142 billion Swiss francs ($138 billion), while total client assets were CHF210 billion. It reported a pro forma net profit of CHF246 million.

Julius Baer Holding AG (BAER.VX) had disclosed its plan to separate the private banking and asset management businesses into two independent companies in May. The two companies will be individually listed on the Swiss stock exchange, starting Oct. 1.

The private bank will have a Tier 1 ratio - a measure of balance sheet strength - of 19%, once $300 million in proceeds from the recent initial public offering of U.S. fund manager Artio Global Investors (ART) is recorded. That is above the bank's 12% target, but Baer wants to keep the excess for the time being - saying it doesn't plan share buybacks - to be able to finance acquisitions if opportunities arise.

Julius Baer shares fell on disappointment about the private bank's modest targets.

At 1310 GMT, they were down CHF3.55, or 6.3%, at CHF51.75, in a lower Swiss market. The stock has gained 29% in value so far this year, underperforming the European banking sector, which is up 53% in the year to date.

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

-By Anita Greil, Dow Jones Newswires; +41 43 443 8044; anita.greil@dowjones.com