With excess capital equating to about 16 percent of Baer's 8.9 billion-franc market value, Goldman Sachs expects Baer to return money to shareholders. Dividends and share buybacks from Baer, which has about 4,500 works of contemporary Swiss art adorning the walls of its branches worldwide, may exceed 1 billion francs in the next two years, Morgan Stanley estimates.
Baer, the fifth-biggest Swiss wealth manager, may struggle to compete with larger rivals for customers who no longer see an advantage from depositing their money in cross-border accounts, said Mathias Bueeler, an analyst at Kepler Capital Markets SA in Zurich, who has a "reduce" rating on the stock.
Onshore Costs
"The strategy isn't to go onshore because it's not something they can afford, especially as the two big banks scale up in those markets," Bueeler said.
UBS client assets are more than nine times bigger than Baer's end-of-October total of 175 billion francs. The franc's strength may have reduced Baer's assets under management to 169.5 billion francs at the end of December, according to the median estimate of four analysts surveyed by Bloomberg.