Baer chairman steps aside, to deal with U.S. probe

ZURICH Mon Mar 19, 2012 7:40am EDT

A traffic sign is pictured in front of the logo of Swiss bank Julius Baer in Zurich February 6, 2012. REUTERS/Arnd Wiegmann

A traffic sign is pictured in front of the logo of Swiss bank Julius Baer in Zurich February 6, 2012.

Credit: Reuters/Arnd Wiegmann

ZURICH (Reuters) - The chairman of Swiss private bank Julius Baer will head a special committee dealing with a U.S. tax probe after leaving his current role, underlining the pressure Swiss banks are feeling from claims they helped wealthy Americans dodge taxes.

Raymond Baer, a 52-year-old member of the bank's founding family who has been at the group almost 25 years and served as chairman for nine, will become honorary chairman of the bank as of its next shareholder meeting in April.

As part that new role, he has been elected to chair a special committee overseeing cooperation with U.S. authorities, the bank said on Monday.

Julius Baer (BAER.VX) is among 11 banks - including Credit Suisse (CSGN.VX) - under investigation by the U.S. Department of Justice. The indictment of Swiss private bank Wegelin in February has heightened tension among private bankers fearful of being next in the firing line.

In February, Julius Baer said it expected to have to hand over client data and to pay a fine as part of the U.S. probe into wealthy Americans who stashed their money in Swiss banks to avoid paying taxes.

"Raymond J. Baer will continue to support the Bank in finding constructive solutions for the past chapters affecting Julius Baer and the banking industry at large," the bank said.

A spokesman said Baer's departure from the chairman's role had been planned for some time, and was not related to his role on the special committee.

The spokesman said the committee was formed when the U.S. issues first surfaced. He added the committee would also deal with the bank's other legacy tax issues in Europe.

Last April, Baer said it had agreed to pay the German tax authorities 50 million euros to close a tax probe.

BAER'S METAMORPHOSIS

"This marks the exit of the last family member from official top positions within the bank and continues the process of turning Julius Baer from a family-run bank to a 'normal' quoted company," said Kepler analyst Dirk Becker.

"We stick to our 'Hold' rating on the stock as we believe its multiples are too high and the bank might face an expensive settlement with the U.S. about the cross-border tax settlement."

Baer shares were down 1.7 percent at 36.88 francs by 0911 GMT, lagged a 0.9 percent weaker European banking index .SX7P.

The bank was established by Julius Baer in 1890 and went public in 1980. The Baer family gave up the majority of its voting rights in 2005 when the bank launched a major expansion. The family's stake is now under 3 percent.

"The metamorphosis to turn our company from family business into a public company in all aspects is concluded," Raymond Baer, who is the last member of the founding family involved in the bank's management, said in a statement.

"Julius Baer has remained small enough to care, but big enough to matter, and retains a deeply entrenched family culture," added Baer, who headed the group's private banking business for ten years before becoming chairman.

The board nominated Daniel Sauter, a veteran of commodities trader Glencore (GLEN.L) and mining company Xstrata XTA.L and a board member since 2007, to take over as chairman.

A bank spokesman said the Baer family was not looking to reduce its stake in the bank.

(Reporting by Emma Thomasson and Martin de Sa'Pinto; Editing by Mike Nesbit and Mark Potter)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

How to get out of debt

Financial adviser Eric Brotman offers strategies for cutting debt from student loans and elder care -- and how to avoid money woes in the first place.  Video