Julius Baer agreed to buy a private bank in Luxembourg, expanding its presence in the financial market of the Grand Duchy.

The Zurich-based institute agreed to buy Commerzbank International Luxembourg, the company said in a statement today. The fully licensed private bank has assets under management of 4 billion euros running on a Temenos T24 platform.

The acquisition will provide Julius Baer with further strategic flexibility for its European business and add relevant t24 experience to the renewal project of Baer's platform, the bank also said.

The private bank earlier this year said it chose Temenos as a partner for the renewal of the banking platform.

Restructuring and Integration Costs

Julius Baer will pay 68 million euros for the bank, assuming 25 million euros of regulatory capital is transferred as part of the transaction. Restructuring and integration costs are expected to amount to about 20 million euros.

The bank expects to conclude the transaction in the summer of 2016, subject to regulatory approval and following the unbundling of the IT platform. Following the integration of the acquired bank, Julius Baer will have about 5 billion francs of assets under management on a pro forma basis in Luxembourg.

Julius Baer expects the acquisition to contribute to its earnings from the conclusion of the transaction.