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Alternative Market Briefing

Julius Baer acquires assets from Israel’s Bank Leumi

Tuesday, July 22, 2014

Bailey McCann, Opalesque New York:

On the heels of news that Swiss bank Julius Baer is likely to come to a settlement with US regulators after charges that the bank helped US citizens evade their taxes, the bank has announced plans to acquire Israel’s Bank Leumi.

Julius Baer CEO Boris Collardi said on the bank's most recent earnings call that he expects to come to a settlement within the next few months. Julius Baer shares rose on the news. Credit Suisse another Swiss bank involved in similar tax troubles settled with regulators for $2.5bn in May.

The bank appears to be confident coming out of this episode, and has announced that it will acquire the international private banking assets of Bank Leumi. According to a Financial Times report, under the terms of the deal Leumi will transfer the clients of its Swiss private bank to Julius Baer, and Julius Baer will buy Leumi’s private bank in Luxembourg. The two units have a combined SFr7bn ($7.8bn) in assets.

Baer last made an acquisition of this nature in 2012, when it purchased the international side of Merrill Lynch's wealth management business.

Leumi is also under investigation for helping US residents evade their taxes, the bank has set aside $275 million for a settlement, that set-aide won't be impacted by the Baer deal.

On the call, Collardi noted that market observers can expect to see c......................

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