Safra Group’s Swiss unit plans to expand in the alpine nation after acquiring Bank Sarasin, the Basel-based private wealth and asset manager.
“The group has ensured a smooth integration of operations during 2013 and is now focused on executing a clear growth strategy using all the attributes of the combined group,” Jacob Safra, vice-chairman of J. Safra Sarasin Holding Ltd., said in its first annual report since the merger.
Client assets under management rose to 131.4 billion Swiss francs ($149 billion) at the end of December, from 129.6 billion francs a year earlier.
Safra Sarasin, part of the international banking group founded in the Syrian city of Aleppo in the 19th century, cut 7 percent of jobs at the combined entities last year, according to the report.
Jacob Safra, whose father Joseph is Brazil’s second-richest man with a net worth of $12.6 billion according to the Bloomberg Billionaires Index, said in May he wants the Swiss firm to become one of the world’s top 20 private banks.
Safra Sarasin trailed Zurich-based UBS AG, Credit Suisse Group AG and Julius Baer Group Ltd. as well as Geneva-based Pictet & Cie. Group SCA and Cie. Lombard, Odier SCA, in a study of global wealth managers’ client assets by London-based Scorpio Partnership in July. Banco Santander SA’s private bank was ranked 20th with $172.7 billion.
Safra Group agreed in November 2011 to pay more than 1 billion francs for Rabobank Groep’s controlling stake in Bank Sarasin. While some foreign wealth managers, including Bank of America Corp., Lloyds Banking Group Plc and ABN Amro Group NV, have exited Switzerland in the past three years, Safra Sarasin said the country remains the best location for a global private bank. It cited Switzerland’s political and legal stability, low government debt, strong currency and expertise in managing wealth.
While Switzerland and London are important private banking centers for Safra Sarasin, the firm is also targeting “growth markets” outside Europe, including Asia and the Middle East, and it benefits from “extensive connections in Latin America,” Ilan Hayim, a member of the board of directors, said in an e-mailed response to questions.
Safra Sarasin, which also has locations in Luxembourg, Monaco, Frankfurt, Dubai, Singapore and the Caribbean region, is developing business with institutional customers and favors organic growth over acquisitions, without excluding “appropriate opportunities as they arise,” Hayim said.
Safra Sarasin said it expects “a positive environment” in financial markets in 2014 after most of the world’s major economies recovered from the financial crisis. The business should benefit from investors’ growing appetite for risk this year as individuals allocate more money to financial markets and institutional investors switch from fixed-income to equity investments, according to the report.
Safra Sarasin, which reported 95 million francs net new money for 2013, said about 58 percent of client assets were booked in Switzerland, with 32 percent deposited elsewhere in Europe and about 8 percent in Asia.
Profit for 2013 was 180.5 million francs, compared with 171.2 million francs a year earlier. The cost-to-income ratio, a measure of profitability, was 67 percent for 2013.