SWITZERLAND – Swiss private bank Julius Baer says its assets under management declined by 16% in 2002 and that it plans to cut 10% of its workforce.

The company said in a statement that its assets under management declined by 16% at the end of 2002 to 106 billion Swiss francs (72.2 billion euros) from 126 billion francs at the end of 2001.

“The market-driven reduction of 20 billion francs was accompanied by net new money of 0.3 billion francs,” it said. It said the trend in the US dollar alone caused the value of its client portfolios to drop by around five billion francs.

Consolidated net profit declined by 19% to 183 million francs and net operating income fell 20% to 1.1 billion francs. The asset-value-related commissions from asset management and investment fell by 18% to 674 million francs.

“In view of the persistently tough operating conditions, Julius Baer will reduce its personnel capacity by at least another 10%, lowering the number of employees to below 2000 by the end of the year,” the bank said in a statement. “Every attempt will be made to make use of the double-digit turnover rate among staff as well as flexible work schedules so that layoffs can be kept to a minimum.”

"Our unique and strong position as an independent family firm with selected core competencies as well as our focus on European markets that remain quite promising is proving successful even in this turbulent environment,” said chief executive Walter Knabenhans. “Moreover, we are benefiting from the fact that we chose a prudent risk strategy during the phases of market exuberance, and we will maintain this approach."

But he sounded a note of caution. "If operating conditions do not soon take a decisive and sustained turn for the better, net profit for the current year will turn out to be considerably lower than that of 2002."

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