* 264 bln Sfr includes 53 bln Sfr from Merrill deal
* Net inflows within 4-6 pct target range
* Gross margin up four basis points to 95 bp
* Cost-income ratio above 73.3 pct vs 65-70 pct goal (Adds detail)
ZURICH, May 14 (Reuters) - Julius Baer said on Wednesday that assets rose 4 percent in the first four months of the year to 264 billion Swiss francs ($296.70 billion) as it attracted new funds from clients and took a majority stake in a Brazilian wealth manager.
The Zurich-based private bank is one of 14 Swiss banks, including Credit Suisse, being targeted by U.S. prosecutors for allegedly offering hidden offshore accounts to help clients avoid taxes.
Baer, which hasn't put aside any funds towards a settlement in the U.S. probe, has said in the past it would like to reach an agreement with U.S. prosecutors as soon as possible. The bank made no comment on the probe in its four-month trading statement on Wednesday.
Baer said net new money through April was "well within" its target for 4 to 6 percent growth on existing assets.
The bank said that its gross margin on assets rose to 95 basis points, up from 91 basis points in the second half, in part due to client activity -- which has long been depressed at most private banks -- perking up in all regions.
Julius Baer, which is integrating Merrill Lynch's overseas wealth arm, which it bought in August 2012, said it cut roughly 100 staff in the first four months.
Spending is still a touch above target. Baer said its cost-income ratio, a key efficiency measure for banks, was slightly above the 73.3 percent it registered in the second half of last year. Its goal is a lower ratio of between 65 and 70 percent.
The cost ratio, pushed up as a result of the Merrill deal, is expected to fall in the second half as more of the U.S. bank's branches are integrated.
Baer's 264 billion francs in assets includes 53 billion francs from Merrill, of which 42 billion has been booked on Baer's platform and paid for by the Swiss bank.
The bank's four-month assets were also bolstered by Brazil's GPS. The Swiss bank bought a majority stake in Brazil's largest independent wealth manager in March for an estimated 100 million francs. ($1 = 0.8898 Swiss Francs) (Reporting By Katharina Bart; Editing by Noah Barkin)