This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at firstname.lastname@example.org or call 800-767-3771 ext. 9339.
As part of its integration process and cost reduction efforts, Julius Baer Group last week announced job cuts at the recently acquired foreign wealth management division of Merrill Lynch − a unit of Bank of America Corporation (
- Analyst Report
. Almost 30%–40% of the workers in this division is about to get pink slips from the Switzerland-based private bank.
In August, the Swiss bank acquired BofA’s international wealth management operations to further diversify its footprints in fast growing emerging markets − Asia, Latin America and the Middle East. The total cost related to the acquisition is anticipated to be CHF1.47 billion ($1.58 billion), including restructuring, integration and retention charges of about CHF400 million ($430 million).
Majority of the global banks are currently aiming to bring down costs amidst the gloomy macro-economic factors and Eurozone crisis. The job cuts are of utmost importance to Julius Baer’s wealth management division since it will help the company to attain its strategy to bring down the cost-income ratio to 70% from its present level of 100%.
BofA has been actively divesting its non-core and unprofitable operations since the last two years. Europe-based Banks – such as Deutsche Bank AG ( DB - Snapshot Report ) , UBS AG ( UBS - Analyst Report ) and Credit Suisse Group ( CS - Snapshot Report ) – have also trimmed down their workforce to a large extent in the recent years.
In the sluggish economic environment, banks have been increasingly adopting rigorous cost-cutting measures to maintain a sound capital buffer in order to endure a financial crisis. However, with numerous job losses, unemployment rate could worsen and further slow down the economic recovery.
Overall, until revenue generation revives, a worsening cost-income ratio will continue to force many more banks to reduce their costs through job cuts, since they need to enhance profitability in order to boost capital ratios.
Please login to Zacks.com or register to post a comment.