The Swiss bank reported a broadly stronger set of financial figures and announced a deal to buy a wealth management house in Brazil.

Julius Baer, which today reported a 14 per cent year-on-year rise in adjusted net 2017 profit to a record SFr806 million ($864 million), also announced it has agreed to buy 95 per cent of Brazilian firm Reliance Group for an undisclosed amount subject to certain performance conditions. That deal adds to a recent acquisition move in Italy.

Zurich-listed Julius Baer said adjusted earnings per share attributable to shareholders rose 13 per cent on the year to SFr3.66.

Assets under management stood at SFr388 billion, up SFr52 billion, or 16 per cent on the year before. AuM was affected by end-of-year reclassification of SFr6 billion to custody assets, following the completed roll-out of the new client advisory models in Switzerland and continental Europe, the bank said in a statement.

Julius Baer logged net new money or of more than SFr22 billion, or 6.6 per cent, exceeding the 4–6 per cent target range. The business had a gross margin of 90 basis points and an adjusted cost/income ratio of 69 per cent.

The bank said its board of directors proposed to pay and ordinary dividend of SFr1.40 per share for the 2017 financial year, a rise of 17 per cent from the level in 2016. The dividend will be approved on 11 April at the bank’s annual meeting.

Brazil
Separately, Julius Baer announced its acquisition of Reliance Group, which is based out of São Paulo. The wealth manager has client assets of about SFr5 billion. The closing of the transaction is expected in the second quarter of 2018 and is subject to customary closing conditions and regulatory approvals, Julius Baer said.

 Reliance, which employs a total staff of 70, was established in 1998. The company specialises in wealth management services for high and ultra-high net worth individuals, making it an “excellent strategic and cultural fit to Julius Baer”, the latter bank said.

The transaction is expected to be accretive to Julius Baer’s earnings by a low single-digit percentage. Julius Baer Group’s BIS capital ratios will be impacted by less than 50 basis points, it said.

 “This acquisition significantly strengthens Julius Baer’s strategic position in Brazil where the Group is already present with the wholly owned GPS Investimentos (GPS), the country’s largest independent wealth manager with client assets of SFr8 billion and over 120 employees,” Julius Baer said. As a result of the deal, it will boost assets run out of Brazil to about SFr13 billion.

The 13 partners of Reliance will continue to lead the business with the same team and with its name under the coordination of Julius Baer.

“Once the transaction is closed, it is envisaged that Julius Baer, together with Reliance and GPS, will determine the best way forward to define potential synergies in a strong mutual cooperation,” Julius Baer continued.

Earlier in January, Julius Baer increased its stake in Italian asset management and private banking firm Kairos Investment Management to 100 per cent, extending its footprint in the country. The group initially purchased 19.9 per cent of Kairos in 2013, followed by an increase to 80 per cent in 2016. The consideration for the additional 20 per cent stake is €96 million ($144 million), subject to closing adjustments.