Julius Baer Appoints Nic Dreckmann COO in Management Revampby
Dreckmann oversaw integration of Merrill Lynch wealth units
Barend Fruithof leaves due to “differing views” on changes
Julius Baer Group Ltd., Switzerland’s third-largest wealth manager, appointed Nic Dreckmann as chief operating officer and simplified its regional divisions to improve efficiency.
Dreckmann, who oversaw the three-year integration of Merrill Lynch wealth units acquired from Bank of America Corp. in 2012, starts his new role on Aug. 1, replacing Gregory Gatesman, who will return to the U.S., the Zurich-based company said in a statement on Tuesday.
Julius Baer, which managed 305 billion Swiss francs ($310 billion) for clients at the end of April, has acquired businesses and hired private bankers to help it chase wealth managers several times bigger such as UBS Group AG and Credit Suisse Group AG. The bank is reorganizing after integrating the Merrill Lynch non-U.S. wealth management business it bought and clearing the distraction of a U.S. tax probe that lasted at least 4 1/2 years.
“Julius Baer is entering a new phase in which it needs to double down on making the business more modern and efficient and convince clients of the value of its services,” said Michael Kunz, an analyst at Zuercher Kantonalbank with a market perform rating on the shares. “Renewing the technology platform is crucial to the future operating model and that’s a key challenge for Dreckmann.”
While the firm says it remains open to acquisition opportunities, it has focused on smaller deals since the Merrill Lynch transaction and has said it needs to spend several hundred million dollars over a period of years to upgrade its information-technology platform. The company paid $547 million to resolve a U.S. Department of Justice investigation in February, erasing most of last year’s profit.
Julius Baer fell 1.3 percent to 39.77 francs as of 10:04 a.m. in Zurich, extending the stock’s decline this year to 18 percent. The Bloomberg Banks and Financial Services Index plunged 29 percent in the same period.
The bank is reducing the number of regional business units to five from six effective Sept. 1, according to the statement on Tuesday. The groupings will be Switzerland, Europe, emerging markets, Latin America and Asia Pacific. Following the acquisition of Commerzbank AG’s Luxembourg private bank, the city in the Low Countries will be the “new European hub,” according to the statement.
Barend Fruithof, head of Switzerland and global custody, is leaving the company “due to differing views of the functional changes in the context of the new regional set-up,” Julius Baer said.
The company also made the following announcements in the statement:
* Giovanni Flury will retire from the executive board
* Philipp Rickenbacher will be head of Advisory Solutions in a unit previously called Investment Solutions
* Gian Rossi will lead Switzerland
* Yves Robert-Charrue will run Europe
* Remy Bersier will be head of Emerging Markets, covering central and eastern Europe, the Middle East, India, Africa, based in Dubai