The Zurich establishment will continue to serve its Brazilian customers from other regions where the group is present. The stock closed up 1.15%.
Wealth manager Julius Baer has signed a contract to sell its activities in Brazil, Julius Baer Brasil Gestão de Patrimônio e Consultoria de Valores Mobiliários, to Banco BTG Pactual for 615 million reais, or 91 million francs. The group is undertaking a major strategic reorganization, as the arrival of a new general director at its head approaches.
The Zurich establishment will continue to serve its Brazilian customers from other regions where the group is present, it said Tuesday in a press release. The bank is in fact established in particular in Mexico, Chile, Uruguay, Colombia and Spain.
In Brazil, Julius Baer currently has branches in São Paulo, Belo Horizonte and Rio de Janeiro where it has a high-net-worth to ultra-high-net-worth clientele. At the end of November 2024, the company had 61 billion reais (9 billion francs) in assets under management.
The operation, to be closed by the end of March, should generate a contribution of 30 basis points to the bank’s core capital ratio (CET1). The latter stood at 16.7% at the end of the first ten months of 2024.
The Brazilian media O Globo reported the information on Monday evening, but placed the amount of the transaction at around 1 billion reais, or around 150 million francs.
Focus on profitability
Julius Baer is in the midst of an overhaul of its activities, after the debacle linked to the Signa affair. In July 2024, the bank raised its gross savings target for the current strategic cycle to 145 million francs, compared to 120 million previously. The savings plan entails the elimination of 250 positions and must be fully effective by the end of 2025.
These announcements come as the Swiss Stefan Bollinger will take charge of the Zurich establishment on Thursday. Since the departure in February 2024 of Philipp Rickenbacher, who left in the wake of the losses suffered in the Signa affair, the current deputy general director Nic Dreckmann has taken over in the interim.
Michael Klien of the Zurich Cantonal Bank (ZKB) foresees as many “easy successes as more serious difficulties to overcome” for the new boss. According to the expert, “it is courageous to manage a key growth market extraterritorially (offshore). But, “it shows the emphasis on profitability.”
“Brazil being one of Julius Baer’s target markets, in one of the largest emerging markets”, Andreas Venditti questions the reasons for the withdrawal of national activities. The Vontobel analyst believes that the establishment “is not willing” to strengthen its investment capacities and modernize its technology “mentioned as necessary in the press release”.
The first analyst opts to “overweight”, and the second to “hold” the action of the wealth manager. At the close of the Swiss Stock Exchange, Julius Baer shares gained 1.15% to 59.80 francs in an SLI up 1.01%.
