Swiss private banking group Julius Baer said Tuesday it would cut around 1,000 jobs when it buys part of Merrill Lynch's wealth management business from Bank of America.
The Swiss bank said it planned "a significant reduction of former Bank of America corporate overhead and other allocations not required going forward in the Julius Baer structure."
This meant it would slash between 15 and 18 percent of the some 5,700 combined staff at the Swiss bank and the part of Merrill Lynch's business it is acquiring, it said in a statement.
Julius Baer announced in August that it would buy Merrill Lynch's wealth management business outside the United States and Japan for some 860 million Swiss francs ($879 million, 716 million euros), in a bid to strengthen its presence in emerging markets.
The bank said Tuesday it expects the deal to close in the first quarter next year and that about 80 percent of the total assets it is acquiring will be reported at Julius Baer by the end of 2013.
It said it had managed to raise 250 million Swiss francs in non-core tier 1 capital in September to help finance the acquisition.
It is also planning a rights issue to help with the financing and said Monday it expects to sell 20 million new shares to rake in around 492 million Swiss francs during the October 10-16 operation.
The Zurich-based bank specialised in wealth management said it would present more details of the acquisition to analysts and investors in London later Tuesday.
In its statement, Julius Baer meanwhile said the planned job cuts and other cost-cutting measures were expected to lead to an implied cost-income ratio of about 70 percent and a pre-tax profit margin of around 25 basis points for the acquired business in 2015.
The Swiss bank also said it expected the deal to be at least earnings per share-neutral by 2014 and that its earnings per share would grow 15 percent in 2015 as a result of the acquisition.
On a separate note, the company also reported Tuesday that the assets it currently has under management (AuM) had increased to a new record high of 184 billion Swiss francs, which is 14 billion francs, or 8.0 percent higher than at the end of 2011.