Switzerland’s Julius Baer said yesterday it has raised SFr175 million (around $190.2 million) of funds by placing subordinated, unsecured debt with institutions and individuals, strengthening its capital base.

The lower tier 2 bonds, which mature on 23 December 2021, carry a coupon of 4.50 per cent and include an optional, one-time redemption call, on 23 December 2016. The bonds will be issued in denominations of SFr5,000. The proceeds will be used for general corporate purposes, the firm said in a statement.

The Zurich-listed bank has set a BIS total capital ratio target of at least 16 per cent and a BIS tier 1 ratio target of at least 12 per cent. As at the end of September, its BIS total capital ratio was 20.4 per cent and the BIS tier 1 ratio 20.1 per cent, which it said makes it “one of the best capitalised banking groups”.

The move by Julius Baer is an example of how Swiss - and other - banks are having to raise capital to boost their capital reserves at a time of continued economic uncertainty. Banks have also had to act to comply with standards under the Basel III international bank capital accords, and large Swiss banks face even tougher capital requirements under domestic rules.

Credit Suisse and BNP Paribas acted as lead managers of the Julius Baer debt issue.