May 11, 2010 / 5:47 AM / 9 years ago

UPDATE 2-Julius Baer Q1 money inflows boosted by growth mkts

* Net new money remains positive on Asian inflows

* AuM up 14 percent, boosted by recovering asset values

* Tier 1 ratio approximately 21 pct vs end-2009 24.2 pct

* Says will meet 4-6 percent net new money target this year

* Shares down 1.47 pct, outperforming sector

(Adds analyst comment, shares, further detail)

ZURICH, May 11 (Reuters) - Swiss private bank Julius Baer BAER.VX said strong money inflows in growth markets compensated for many European offshore clients repatriating funds from Swiss banks amid tax pressures.

Assets under management rose 14 percent from the end of 2009 to 175 billion Swiss francs ($164 billion), with recovering markets boosting asset values, Switzerland’s biggest pure-play private bank said on Tuesday.

The Swiss banking industry has come under increasing pressure from neighbouring states over the Alpine nation’s bank secrecy rules.

Many Italian clients have moved money home amid a tax amnesty, while a data theft scandal affecting some German customers of bigger rival Credit Suisse CSGN.VX has rattled other offshore clients of Swiss banks. [ID:nWEB7669]

Net new money inflows showed a positive trend compared with the second half of 2009, but were slightly below the group’s medium-term target, Baer said, adding its gross margin was improving.

“The group still expects to attract net new money this year at a pace in line with its medium-term net new money target,” it said, citing continued solid growth from growth markets.

Shares in Julius Baer were trading down 1.47 percent at 0832 GMT, outperforming the STOXX European banks index .SX7P which was down 2.29 percent.

“The way seems to have been paved for a promising future,” said analysts at Swiss private bank Wegelin, adding risks could be lower for Baer than for larger, integrated banks.

“Recent share price weakness could present an opportunity to buy the stock, even if Baer shares will hardly be able to avoid possible future storms on financial markets completely, at least from a technical point of view,” they said.

Baer and Credit Suisse mopped up many of the billions of client assets gushing from UBS UBSN.VX(UBS.N) throughout the crisis after the world’s biggest wealth manager needed a state bailout and become embroiled in a damaging U.S. tax dispute.

Slower-than-targeted inflows to Baer in the first quarter could support UBS Chief Executive Oswald Gruebel’s recent comments that UBS should stem the outflows by the end of the year. [ID:nLDE6421E5]

Baer, which split its core private bank and asset management operations into two separately listed companies in 2009, said it’s Tier 1 ratio was around 21 percent, showing the bank still has a very stable capital position with cash to spare.

The integration of ING’s ING.AS Swiss private banking assets, bought last year, would complete by the end of May 2010, Baer said. [ID:nN23405844] (Reporting by Jason Rhodes; Editing by Hans Peters) ($1=1.068 Swiss Franc)

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