UPDATE 3-J.Baer inflows slow as tax clampdowns bite

* FY net profit 473 mln Sfr vs 461 mln Sfr in poll

* Net new money 5 bln Sfr vs 5.5 bln Sfr in poll

* Dividend 0.40 Sfr, tier I capital ratio 24.2 pct

* CEO says no indication stolen client data stems from Baer

* Shares down 2.6 pct, in line with European banks

(Adds comments from analyst conference, updates shares)

By Jason Rhodes

ZURICH, Feb 5 (Reuters) - Swiss private bank Julius Baer (BAER.VX) said its inflow of client money slowed last year as international tax clampdowns caused many off-shore customers to repatriate funds.

Baer has benefited from a torrent of client money gushing from its larger, troubled Swiss rival UBS (UBSN.VX)(UBS.N), and inflows continued into 2010, but the slower rate experienced last year could herald a more positive outlook for UBS.

Even so, full-year net profit rose 7 percent to 473 million Swiss francs ($446 million), just ahead of expectations, Switzerland's third-biggest bank said, despite the client money inflows reaching only the lower end of its target and missing forecasts.

Inflows into Baer's Asian business compensated for many Italian clients taking advantage of an Italian government tax amnesty and moving money home from Swiss branches in 2009, as well as Baer's phased exit from the U.S., prompted by the case against UBS, which authorities there accused of helping tax dodgers.

"The stock traded down to our target price over the last few weeks. While it is now more adequately priced, risks are mounting as well," said Kepler Capital Markets analyst Mathias Bueeler.

"We continue to believe the stock will only deliver modest returns over the next 12 months."

Shares in Julius Baer traded 2.6 percent lower at 1044 GMT, in line with the DJ Stoxx European banks index .SX7P.

Continued international pressure on Swiss bank secrecy is unlikely to relent any time soon, with Germany the latest country to launch a broadside on its Alpine neighbour.

German Finance Minister Wolfgang Schaeuble sent shockwaves through the Swiss private banking industry this week when he said Berlin was prepared to pay for stolen data belonging to potential tax cheats at a Swiss bank. [ID:nLDE6101NM]

"We have no indication that these are Julius Baer data," said Chief Executive Boris Collardi. "We are reasonably comfortable with our German exposure."

ACQUISITIONS

Baer had a turbulent 2009, entrusting whizz-kid Boris Collardi with transforming the group into a pure-play bank after the suicide of Alex Widmer, his popular predecessor as chief executive. [ID:nL1480209]

It and domestic rival Credit Suisse (CSGN.VX) have benefited from customers jumping ship from UBS after its U.S. tax dispute and the biggest loss in Swiss corporate history.

Baer's slowing inflows could indicate UBS is turning the corner, even if the negative headlines are not completely over yet for its beleaguered larger rival. UBS and Credit Suisse reveal full-year results next week.[ID:nLDE6121XL]

Tier I capital ratio was 24.2 percent at the end of the year, double its target, showing its capital position remained very robust under the stewardship of Collardi, who stamped his mark on the bank by grabbing ING's (ING.AS) Swiss private banking assets for 520 million francs in October. [ID:nSIN287448]

Baer has said it will use its cash pile for further acquisitions in Europe or Asia and raise new capital if necessary to fund a bigger buy.

"Right now our focus is on Switzerland as a consolidation place, but not necessarily on adding a high concentration of offshore European clients at one go," said Collardi, adding Baer would also consider targets in the rest of Europe and Asia.

"We anticipate 2010 being a very active M&A market," he said.

The bank said it would pay a dividend of 0.40 Swiss francs, reflecting a flat dividend policy taking into account the spin-off of asset management arm GAM GAMH.VX last year.

Baer would, however, refrain from share buybacks in the near future, in favour of retaining the financial flexibility offered by its strong capital position, said Chief Financial Officer Dieter Enkelmann.

It would also continue to hire new relationship managers, who bring with them the highly sought cash of their clients, after poaching 48 client advisers in 2009, despite this being a difficult year to find quality new staff, Collardi said. (Additional reporting by Sam Cage, editing by Will Waterman) ($1=1.060 Swiss Franc)