Some staff at Bank of America Merrill Lynch’s non-US wealth business could lose their jobs once Julius Baer’s purchase of this unit is complete although any changes depend on exactly how many assets come over, the Swiss bank says.

On the day that Zurich-listed Julius Baer announced the deal, which will boost its assets under management by up to 40 per cent to SFr251 billion (around $256 billion), the bank sought to elaborate on some of the impact.

With any such merger and acquisition deals, speculation focuses on whether employees affected by functional overlaps will be shed, either voluntarily or through redundancy. So far, Julius Baer is providing no hard numbers. The deal, if fully approved by regulators and shareholders, will be complete by 2015 – over two years away.

But a spokesperson for Julius Baer told this publication that changes could involve job reductions. Also, the Merrill Lynch tag will disappear as the business is drawn into the Julius Baer organisation.

A reduction in some jobs is “very likely as there are overlaps of functions and we want to increase profitability of the business”, the spokesperson said. “These are not yet targets or estimates,” the spokesperson said.

“Much depends on the amounts of assets transferred to us, as this affects the numbers of people,” he said.

As described in the recent Scorpio Partnership annual benchmark report on global wealth management, the industry is still contending with pressures on margins and high regulatory costs, although for the top players, margins improved slightly from the levels seen a year ago.

Employees, assets

The deal means Julius Baer acquires SFr81 billion of assets under management (based on 30 June figures) and more than 2,000 employees, including over 500 financial advisors.

“The transaction is a combination of legal entity acquisitions and business transfers, that by the end of the expected two-year integration period, is currently estimated to result in additional AuM of between SFr57 billion and SFr72 billion, of which approximately two thirds from growth markets,” Julius Baer said.

The agreed transaction price is 1.2 per cent of AuM transferred. At SFr72 billion AuM transferred, Julius Baer would pay about SFr860 million.

For the first full years after the integration (2015 and beyond), Julius Baer said it expects to set the following targets for the new enlarged group: net new money 4-6 per cent, cost/income ratio 65-70 per cent and pre-tax profit margin 30-35 basis points.