Julius Baer has announced that it has agreed to acquire Commerzbank International SA Luxembourg (‘CISAL’), a well-established and fully-licensed private banking franchise with close to EUR 3bn ($3.23bn) assets under management, from Commerzbank.
This transaction will significantly strengthen Julius Baer’s position in the Luxembourg financial centre. CISAL’s client assets are booked on a Temenos T24 banking platform. CISAL’s staff includes a highly experienced IT team with relevant expertise of the Temenos T24 technology. As announced earlier this year, Julius Baer has selected Temenos as its partner for the planning of its core banking platform renewal project. The total consideration is approximately EUR 68m ($73.1m), assuming EUR 25m ($26.8m) of regulatory capital is transferred as part of the transaction. Total restructuring and integration costs are expected to amount to approximately EUR 20m ($21.5m).
Closing of the transaction is expected to take place in the summer of 2016, subject to regulatory approvals and following the unbundling of the local IT platform. After closing, Julius Baer’s Luxembourg-based business will manage total assets of around CHF 5bn ($5.24bn) on a pro forma basis. The transaction will be accretive to adjusted earnings immediately following closing.
Boris F.J. Collardi, CEO of Julius Baer, commented: “The acquisition of a fully-licensed bank in Luxembourg as well as the Temenos-based booking centre and the related IT expertise provide us with important strategic flexibility for our European businesses. Furthermore, it strengthens the implementation of our global banking platform project by aligning Europe with our Swiss and Asian platform strategy, thus reducing the execution risk.”
Gian A. Rossi, Region Head Northern, Central and Eastern Europe, added: “The acquired entity is a pure private banking business with a stable base of European clients and hence fits very well with Julius Baer’s business approach and strategy. We are pleased to add significant scale to our local franchise in the important international financial centre of Luxembourg and look forward to leveraging the business opportunities provided by the full bank licence.”