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UPDATE 1-Julius Baer CEO says could digest another Merrill-sized deal
February 2, 2015 / 5:32 PM / 3 years ago

UPDATE 1-Julius Baer CEO says could digest another Merrill-sized deal

(Adds CEO comments)

ZURICH, Feb 2 (Reuters) - Swiss private bank Julius Baer could afford another deal of around 60 billion Swiss francs ($65 billion) in assets it is taking on with its purchase of Merrill Lynch’s overseas wealth arm, after it cuts franc spending, its chief executive said.

“Over time, there may be one or the other Merrill-type of larger internationally diversified assets where the majority of the business and the costs are outside of the Swiss franc,” Chief Executive Boris Collardi said.

Julius Baer bought Merrill Lynch’s overseas wealth arm in August 2012.

Collardi said Zurich-based Baer’s immediate priority is to slash Swiss franc-denominated spending after Switzerland’s central bank scrapped a currency cap against the euro and sent the franc surging.

“The instruction to our guys is concentrate entirely on the business,” Collardi said in an interview with Reuters on Monday.

But Collardi, a prolific dealmaker, also makes clear that the strong Swiss franc will throw up tempting opportunities, first in the form of smaller Swiss private banks where Baer can acquire advisors, and, as a result, add assets easily.

Later, more large deals may be on the cards.

Collardi did not say how much Baer could spend on deals, saying this depended on its capital strength, ability to tap capital markets for deal funding and acquisition price.

He denied that Baer was among suitors for Coutts International, the private bank of Royal Bank of Scotland , saying it was “a mystery” how Baer had been linked to the sale because it had not been involved from the outset of the process.

Baer earlier on Monday announced plans to cut 200 jobs in a 100 million franc cost-cutting programme, the first of what is expected to be a raft of measures on the part of banks and other producers of Swiss goods. ($1 = 0.9246 Swiss francs) (Reporting By Katharina Bart and Oliver Hirt; editing by Susan Thomas)

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