CS Credit Suisse Group

ZURICH—Julius Baer Group AG said Monday its adjusted net profit fell sharply last year, as the Swiss private bank absorbed the cost of settling a longstanding U.S. investigation of its aiding of American tax evasion.

Zurich-based Julius Baer said adjusted net profit fell 52% in 2015 from the previous year, to 279 million Swiss francs ($273 million). The result included an anticipated $547 million charge, related to the bank's forthcoming settlement of the U.S. Justice Department probe.

Excluding the impact of the charge, Julius Baer said underlying profit before taxes increased 17% last year from 2014 to 830 million francs.

Assets under management rose 3% to 300 billion francs, Julius Baer said.

It said 60 billion francs of Julius Baer's managed assets have resulted from its acquisition of Bank of America Corp.'s Merrill Lynch wealth-management business outside of the U.S., a prolonged purchase that has been closed in stages following its unveiling in 2012. A total of 59 billion francs of that amount has now been transferred to Julius Baer, the bank said.

Julius Baer had set a target of obtaining between 57 billion francs and 72 billion francs in managed assets as a result of the Merrill purchase.

The increase in assets under management came despite a "negative currency impact" of 10 billion francs, the bank said. The strengthening of the Swiss franc during the past year, following a decision by the Swiss central bank to remove a cap on the value of the currency, has had a negative impact on the relative value of managed assets at the bank held in other currencies, such as euros.

Julius Baer, which specializes in wealth management, said net new money rose 4.2% during the year, to 12 billion francs. The bank also said that it netted 8 billion francs in new assets through acquisitions.

The charge to Julius Baer's results stemming from the U.S. settlement was initially announced in December, alongside the news that the bank had reached an "agreement in principle" to resolve the matter.

In 2011, Julius Baer became one of about a dozen Swiss banks to come under U.S. Justice Department investigation for aiding American tax evasion. Other banks in Switzerland have resolved their own, related U.S. probes in recent years, including Credit Suisse Group AG.

On Monday, Julius Baer said the U.S. Justice Department has now provided "final approval" of the bank's settlement, pending a court hearing on the matter.

Julius Baer said its board of directors now intends to propose a 10% increase to the bank's ordinary dividend to 1.10 francs a share.

Write to John Letzing at john.letzing@wsj.com

(END) Dow Jones Newswires

February 01, 2016 02:05 ET (07:05 GMT)

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