Bank of China enters into a partnership with Switzerland’s largest private bank after surrendering its wealth management business.
State-owned BOC and Julius Baer Group Ltd have formed a strategic partnership to refer clients in the future. BOC sold Bank of China (Suisse), its Swiss unit, because of the latter’s weaker than expected performance and the tough competition in private banking.
The two lenders said their strategic cooperation agreement means they will mutually cross-refer clients and undertake various joint marketing activities.
BOC will refer clients with international private banking needs outside the Chinese mainland to Julius Baer, while Julius Baer's clients requiring commercial banking services will be referred to BOC.
The two companies will also cooperate in product distribution, financial market research and certain joint initiatives such as investment conferences.
Analysts said that BOC’s selling its Swiss operation after four years doesn't mean BOC will stop developing private banking across Europe. It just reflects its decision to further integrate local business.
Apart from Switzerland, BOC has also entered the overseas private banking business in Hong Kong, Macao Luxembourg and Singapore.
In 2011, BOC had established 3,699 wealth management centers, 166 prestigious wealth management centers and 19 private banking centers in mainland China. Assets under management reached US47.2 billion.
Julius Baer reported a near 20% increase in first-half net profits to 175 million Swiss francs, mainly driven by strong inflows from emerging markets.
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