Switzerland's Julius Baer has said it plans to lower overall operating expenses by up to 15 per cent with measures that include job cuts at its flagship private bank, according to the Wall Street Journal.

"Assuming continued business development like in the first two months of 2009, group operating expenses should be decreased by 10 per cent to 15 per cent," chief financial officer Dieter Enkelmann reportedly told investors at a financial conference sponsored by investment bank Morgan Stanley, according to the presentation material.

That translates to cuts of SFr279 million ($244.7 million), based on 2008 earnings from the bank, which employed 4,335 people at year-end, 69 per cent of them in private banking.

The comments from Mr Enkelmann, which, the paper said, were confirmed by a spokesman, would represent a redoubling of current cost-cutting efforts. They also mark a subtle shift since February for the private bank, which has seen a costly and initially successful expansion since 2006. But costs at the unit have come to haunt Julius Baer as it braces itself for lower revenue due to a shrinking asset base amid falling securities markets.

Julius Baer said cuts at the private bank will be made according to strategic importance and profitability of existing locations, which include Hong Kong, Abu Dhabi and St Moritz. A bank spokesman told the paper that Julius Baer isn't ruling out closing offices, but didn't elaborate on specifics or on how high job cuts might tally.

Meanwhile, Julius Baer will continue to hire advisors for the wealthy selectively and mainly in existing locations. Hires from 2007 and 2008 are fuelling net inflows of fresh money to the unit so far this year, Mr Enkelmann is reported to have said.

“All told at the private bank, gross margins can be expected to decline due to reduced client activity and to an unfavourable asset mix,” he added.

The cost cuts come as Julius Baer told investors that outflows at GAM, which sells funds of hedge funds, have continued in 2009. Earlier this week, Julius Baer said it is buying back Augustus Asset Management, a specialist in fixed income and foreign exchange with $7.6 billion in assets, for an undisclosed price.