Julius Baer Buys Merrill Lynch’s Private Bank

Julius Baer, one of Switzerland's oldest and largest private banks, is set to buy Bank of America Merrill Lynch's private bank outside the US, marking the latest in a line of banks that are looking to sell off its wealth management or private banking assets.

In a deal worth 860m Swiss francs, Julius Baer will boost its assets under management (AuM) by 40 percent and it says that it plans to raise 1.19bn Swiss Francs in new capital following the deal.

The private bank acquisition marks the latest in a long line of purchases by Julius Baer and signals a stark change in the banking industry

Julius Baer has bought a number of units from investment banks and asset management firms over the last few years, such as asset manager GAM for 5.6bn Swiss Francs from UBS in 2005 and Ehinger Armand von Ernst, Ferrier Lullin & Cie and BDL Banco di Lugano.

Since the credit crisis in August 2007, banks have looked to shore up capital by selling off various units. Notably, a number of banks have sold off their private banking or wealth management units, as well as some asset management arms.

Earlier this year, RBS agreed to sell most of its cash-equities and associated investment-banking business in the Asian-Pacific region to Malaysia's second-largest bank by assets CIMB Group Holdings.

Last month, the Reserve Bank of India gave the green light to HSBC to acquire 23 of the 31 branches in India of Royal Bank of Scotland.

In April, reports revealed that ING sent financial details of the Dutch group's $6bn Asian insurance businesses in Korea, Malaysia and Japan to a string of bidders

Meanwhile, Deutsche Bank is in the process of unloading a large chunk of its asset management business to US institutional asset manager Guggenheim Partners. It is looking to sell Deutsche Asset Management that may include Deutsche Bank's American asset management business, Deutsche Insurance Asset Management and RREEF, a global alternative investment management business.

On the other side of the business, other firms are looking to descale its corporate side in order to snap up or prepare for more wealth management activities, which is widely seen as less risky.

For example, UBS said that following the years of criticism, downturn in its investment banking model and its bid to offload its risk weighted assets, it will be concentrating on wealth management.