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Julius Baer, one of the top global private banks with more 400 billion Swiss francs ($404.8bn) of assets under management, is eyeing acquisitions in the broader Middle East and Africa region as part of its global growth strategy.
"We are always open [to opportunities] but the question is to find something to buy. The last eight to nine years have shown strong asset base [growth] so valuations matter," Remy Bersier, the head of Julius Baer's emerging markets business told The National on Tuesday.
“We are always looking and scrutinising the market [for acquisitions] and this is the permanent duty of the board of directors.”
Julius Baer has been acquiring assets and forging partnerships worldwide to expand its presence in different geographies. It merged with the ING Bank (Switzerland) in 2010 and integrated $60bn worth of assets when it acquired international wealth management unit of the US-based Merrill Lynch in 2012.
The Swiss bank forged a strategic wealth management joint venture with Siam Commercial Bank in Thailand in March this year and completed the acquisition of 95 per cent stake of Reliance Group in Brazil in early June. More recently, Japan's Nomura agreed to buy a minority stake in Julius Baer Group’s unit in Japan.
Private banks such as Julius Baer are looking to solidify their presence in the oil-rich economies of the Middle East and expand into the fast-growing African markets. Total personal wealth in the Middle East increased by 11 per cent to $3.8 trillion in 2017, with per capita wealth jumping to $18,000 last year, according to global consultancy Boston Consulting Group (BCG).
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Total personal wealth in Africa climbed by 14 per cent to $1.6tn 2017 and BCG expects personal wealth in both regions combined to rise at a compound annual growth rate of 8 per cent to 10 per cent over the next five years.
“For the time being we are building the existing organisation but we never exclude any opportunities in the field of acquisitions … as it meets our growth and the clients’ requirements also,” Mr Bersier, who is also a member of the Swiss bank’s executive board, said in Dubai.
“Julius Baer has been growing three-fold organically by strategic recruiting and by acquisitions,” he said.
The bank, which was the first to get an advisory and wealth management licence in Dubai’s on-shore financial hub, Dubai International Financial Centre, has grown rapidly with 170 personnel now serving clients across the region. There is a “clear visibility on wealth growth and wealth creation” in the Middle East, he said, declining to reveal how much the region contributes to the bank’s overall revenues.
Bernhard Hodler, the bank's chief executive, in March told The National that assets under management in the region exceeded the target growth rate of between 4 per cent to 6 per cent in new money that the bank seeks to attract annually. Globally, Julius Baer was able to increase new money by 6.5 per cent last year, and expects to attract as much as 6 per cent more in 2018.
The Middle East region is forecast to grow in line with that this year, he said at the time.
From its Dubai hub, the bank has expanded into other territories and now has advisory licences in Bahrain and Beirut and operates representative offices in Abu Dhabi and Cairo in Egypt.
The GCC remains the fastest-growing market for the Julius Baer with the UAE and Saudi Arabia, the region’s two biggest economies, being the prime geographies for business, Mr Bersier said.
In Africa, the bank has received an advisory licence and permission to open a representative office in Johannesburg, which, Mr Bersier said, will be inaugurated in November this year. The South African market shows real potential in terms of wealth creation so the bank wants to position itself for the growth, he added.
Julius Baer is also planning to the upgrade its representative office in the Russian capital Moscow and obtain a licence to advise high net worth clients in the country, Mr Bersier said.