Tax charges and a merger make Julius Baer's profit fall
Julius Baer Group AG said its profits fell due to two pressing concerns. These were a merger for expansion and a UK tax treaty.
Tax charges related to the treaty was booked at CHF28 million (US$29.8 million). The treaty stated that citizens of the United Kingdom who have accounts in Swiss banks were liable for taxes on savings and future capital gains. However, the identity of the account holders will remain to be anonymous. Julius Baer managed money for wealthy clients.
Meanwhile, the Swiss bank has an ongoing acquisition of Merill Lynch wealth management business outside of US shores. The ongoing acquisition has raised its total assets under management 15%. Its total assets now reached CHF218 billion, mid-point this year.
Due to these tax changes and the Merill integration, Julius Baer's fell 30% to CHF114 million. There were increases of 23 and 25% in the firm's adjusted operating expenses and operating income, respectively.