Media Release from Julius Baer Group Ltd.

Media Release from Julius Baer Group Ltd. Media and Investor Conference/Webcast today at 9.00 a.m. at the Widder Hotel, Zurich Zurich, 13 August 2012 Julius Baer to acquire Merrill Lynch s International Wealth Management business outside the United States from Bank of America, with strong focus on growth markets Julius Baer, the leading Swiss private banking group, has agreed, subject to regulatory and shareholder approvals, to acquire Merrill Lynch s International Wealth Management business (IWM) based outside the US with USD 84 (CHF 81) billion of assets under management (AuM) as of 30 June 2012 and over 2,000 employees, including more than 500 financial advisers. The transaction is a combination of legal entity acquisitions and business transfers, that by the end of the expected two-year integration period, is currently estimated to result in additional AuM of between CHF 57 billion and CHF 72 billion, of which approximately two thirds from growth markets. Assuming CHF 72 billion AuM transferred, Julius Baer s existing AuM as of 30 June 2012 would increase by approx. 40% to CHF 251 billion and its total client assets to CHF 341 billion, both on a pro forma basis. This acquisition brings Julius Baer a major step forward in its growth strategy and will considerably strengthen its leading position in global private banking by adding substantial scale and additional offices primarily in growth markets, but also in Europe. As part of the transaction, Julius Baer and Bank of America Merrill Lynch (BofAML) have agreed to enter into a cooperation agreement whereby BofAML will provide certain products and services to Julius Baer, including global equity research. In addition there will be crossreferral of clients between both organisations. The acquisition is expected to be earnings accretive from the third full-year following principal closing, i.e. the first full steady-state year following integration. Irrespective of the AuM transferred between CHF 57 billion and CHF 72 billion, the EPS accretion 1 target in 2015 is approx. 15%. The agreed transaction price is 1.2% of AuM transferred (payable as and when AuM transfer to Julius Baer). Therefore, at CHF 72 billion AuM transferred, Julius Baer would pay approx. CHF 860 million. At that level of AuM transferred, the amount of regulatory capital required to support the incremental risk-weighted assets is expected to amount to approx. CHF 300 million, and the total restructuring, integration and retention costs in connection with the necessary transfer of the business to the Julius Baer platform are expected to amount to up to approx. CHF 400 (after tax CHF 312) million. Separately, Bank of America (BofA) will assume up to an additional CHF 121 2 (USD 125) million of defined pre-completion restructuring and integration costs. 1 Based on adjusted net profit, i.e. excluding integration and restructuring costs and amortisation of intangible assets 2 USD amounts have been translated into CHF at an exchange rate of CHF 0.97 per USD 1.00 JULIUS BAER GROUP LTD. Bahnhofstrasse 36, P.O. Box, 8010 Zurich, Switzerland, telephone +41 (0) 58 888 1111, fax +41 (0) 58 888 5517, www.juliusbaer.com

The Board of Directors of Julius Baer Group intends to put funding in place at a level that is sufficient to support the acquisition of up to CHF 72 billion AuM. At that level, the transaction is expected to be funded by a combination of up to CHF 0.53 billion from existing excess capital, CHF 0.2 billion from the issuance of new hybrid instruments, and CHF 0.74 billion of new share capital, of which CHF 0.24 billion is to be issued to BofA as part of the consideration, and CHF 500 million to be raised via a proposed rights offer. In addition, as part of the rights offer, the Board of Directors will propose to raise a further CHF 250 million in new share capital for future strategic flexibility (not related to the IWM transaction), resulting in a total CHF 750 million proposed rights offering. The proposed capital increase is subject to approval by an Extraordinary General Meeting expected to be scheduled for 19 September 2012. Principal closing following major regulatory approvals and other closing conditions is expected towards the end of 2012 or in early 2013. Business transfers and full integration are expected to occur over a two-year period thereafter and to be completed by Q4 2014/Q1 2015. As a consequence of the significantly enlarged business globally, the current Julius Baer management structure will be realigned as of the principal closing. For the first full years after the integration (i.e. 2015 and beyond, assuming the integration is completed in Q4 2014), Julius Baer envisages targets for the new enlarged group as follows: Net new money 4-6%, cost/income ratio 65-70% and pre-tax profit margin 30-35bps. In addition, given the imminent convergence of the BIS and Swiss approaches to calculating capital ratios in 2013, the minimum required BIS total capital ratio will be reduced from 14% to 12%. As a consequence, Julius Baer adjusts its BIS total capital ratio target from the current 16% to 15%, which represents a 3% (thus far 2%) buffer over the regulatory minimum requirement. The 12% BIS tier 1 target ratio will remain unchanged. In the proposed capital planning, Julius Baer s capital ratios are expected to remain above target levels at all times throughout the integration process. The previously announced share buyback programme will be cancelled. Julius Baer, the leading Swiss private banking group, has agreed, subject to the regulatory and shareholder approvals, to acquire Merrill Lynch s International Wealth Management business (IWM) based outside the US and Japan from Bank of America (BofA) with USD 84 (CHF 81) billion of assets under management (AuM) as of 30 June 2012 and over 2,000 employees, including more than 500 financial advisers. Approximately two thirds of IWM AuM are from clients domiciled in growth markets in Asia (more than half), Latin America and the Middle East. The transaction is a combination of legal entity acquisitions and business transfers and, by the end of the expected two-year integration period, is currently estimated to result in additional AuM of between CHF 57 billion and CHF 72 billion, of which approximately two thirds from growth markets. At CHF 72 billion AuM transferred, this would increase Julius Baer s existing AuM by approx. 40% to CHF 251 billion and its total client assets to CHF 341 billion at the end of the two-year integration period, both on a pro forma basis. While the bulk of IWM s business is in locations where Julius Baer is already present, such as Geneva, London, Hong Kong, Singapore, Dubai and Montevideo, the acquisition would add new locations in Bahrain, the Netherlands, India, Ireland, Lebanon, Luxembourg, Panama and Spain 3 to Julius Baer s existing network. Post integration, Julius Baer will be present in more than 25 countries and 50 locations globally. At CHF 72 billion transferred, the proportion of AuM derived from growth markets is expected to increase from over a third today to almost half, on a pro forma basis. Excellent strategic, cultural and geographic fit strengthening of leading position Daniel J. Sauter, Chairman of the Julius Baer Group, said: This transaction represents a rare opportunity to acquire an international pure-play wealth management business of significant size and will add substantial scale to our business in Europe and in key growth markets in Asia, Latin America and the Middle East. Due to its strong presence in strategic growth markets and its business characteristics, Merrill Lynch s International Wealth Management business is an excellent strategic, cultural and geographic fit for Julius Baer. 3 The acquisition excludes some small IWM locations 2

Boris F.J. Collardi, CEO of the Julius Baer Group, added: This acquisition brings us a major step forward in our growth strategy and will considerably strengthen Julius Baer s leading position in global private banking by adding a new dimension not only to growth markets but also to Europe. The compatibility and complementarity of the two business models, once integrated, will create a new reference in private banking and a powerful offering for all clients of the combined businesses. In addition, it will reinforce Julius Baer s attractiveness as an employer of choice in the private banking industry. We very much look forward to working with our new colleagues who will undoubtedly enrich our corporate culture. The strong IWM franchise has been present in international key markets for decades. The compatibility with Julius Baer s business is evidenced, among others, by the similar asset allocation composition or similar average AuM per client. Furthermore, close to half of the financial advisors at IWM have been servicing clients at their company for more than ten years. As part of the integration, the acquired legal entities will operate under the brand Julius Baer. Julius Baer s client-centric approach and open-product platform will be enhanced through the complementary service models and cultures of the two businesses that will promote valuable crossfertilisation of skills and experience. Clients and employees will benefit from new opportunities as a result of strengthened local franchises. Strong EPS accretion 1 expected from 2015 The agreed transaction price is 1.2% on AuM transferred (payable as and when AuM transfer to Julius Baer). Therefore, assuming CHF 72 billion AuM transferred, Julius Baer s existing AuM as of 30 June 2012 would increase by approx. 40% to CHF 251 billion on a pro forma basis and its total client assets to CHF 341 billion. At that level of AuM transferred, the amount of regulatory capital required to support the incremental risk-weighted assets is expected to amount to approx. CHF 300 million. Total transaction, restructuring, integration and retention costs in connection with the necessary transfer of the business to the Julius Baer platform are expected to amount to up to approx. CHF 400 (after tax CHF 312) million. Major components of these costs include IT costs (e.g. maintaining IWM and Julius Baer platforms in parallel throughout the transfer process, as well as platform enhancements, infrastructure and migration costs), retention costs required to incentivise and retain financial advisors and other key personnel, costs for temporary staff as well as other restructuring and integration expenses. Separately, BofA will assume up to an additional CHF 121 (USD 125) million of defined precompletion restructuring and integration costs. The acquisition is expected to be earnings accretive from the third full-year following principal closing, i.e. the first full steady-state year following integration. Irrespective of the AuM transferred between CHF 57 billion and CHF 72 billion, the EPS accretion¹ target in 2015 is approx. 15%. Dieter A. Enkelmann, CFO of Julius Baer, said: For our shareholders the acquisition represents a substantial investment in our future growth. We have a number of experienced teams available which will be responsible for achieving a smooth global integration. These teams have already been successful in integrating several banks over the last years. Furthermore, the resulting geographic diversification is expected to significantly reduce Julius Baer s net currency exposure to the Swiss franc. For the first full years after the two-year integration (i.e. 2015 and beyond assuming the integration is completed in Q4 2014), Julius Baer envisages targets for the new enlarged group as follows: Net new money 4-6%, cost/income ratio 65-70% and pre-tax profit margin 30-35bps. In addition, given the imminent convergence of the BIS and Swiss approaches to calculating capital ratios in 2013, the minimum required BIS total capital ratio will be reduced from 14% to 12%. As a consequence, Julius Baer adjusts its BIS total capital ratio target from currently 16% to 15%, which represents a 3% (thus far 2%) buffer over the regulatory minimum requirement. The 12% BIS tier 1 ratio target remains unchanged. In the proposed capital planning, Julius Baer s capital ratios are expected to remain above target levels at all times throughout the integration process. The previously announced share buyback programme will be cancelled. 3

Funding includes use of existing excess capital, hybrid issuance and a capital increase Bank of America (BofA) as shareholder The Board of Directors of Julius Baer Group intends to put funding in place at a level that is sufficient to support the acquisition of up to CHF 72 billion AuM. At that level, the transaction is expected to be funded by a combination of up to CHF 0.53 billion from existing excess capital, CHF 0.2 billion from the issuance of new hybrid instruments, and CHF 0.74 billion new share capital, of which CHF 0.24 billion is to be issued to BofA as part of the consideration, and CHF 500 million to be raised via a proposed rights offering. In addition, as part of the rights offering, the Board of Directors will propose to raise a further CHF 250 million in new share capital for future strategic flexibility (not related to the IWM transaction), resulting in a total CHF 750 million proposed rights offering. The proposed capital increase is subject to approval by an Extraordinary General Meeting expected to be scheduled for the 19 September 2012. While the principal closing following major regulatory and shareholder approvals and other closing conditions is expected towards the end of 2012 or in early 2013, the business transfers and integration are expected to occur over a two-year period thereafter and to be completed in Q4 2014/Q1 2015. The parties will work closely together to develop a detailed plan for the transfer and separation of the acquired business for each jurisdiction. Management structure realignment cooperation with BofAML As a consequence of the significantly enlarged business globally and to reflect the increased importance of growth markets, the current Julius Baer management structure will be realigned as of principal closing (see organisational charts attached). As part of the transaction, Julius Baer and BofAML have agreed to enter into a cooperation agreement whereby BofAML will provide certain products and services to Julius Baer, including the provision of global equity research, product offerings, as well as structured and advisory products. In addition there will be cross-referral of clients between both organisations. Perella Weinberg Partners acted as exclusive financial advisor to Julius Baer Group on this transaction. More information on the acquisition will be provided today at a presentation for media representatives, analysts and investors, which will take place at 9.00 a.m. at the Widder Hotel, Rennweg 7, in Zurich. The presentation will be webcast live on the internet via www.juliusbaer.com/webcast. The presentations held at the conference will also be available on our website, www.juliusbaer.com. Contacts Media Relations Tel. +41 (0)58 888 8888 Investor Relations Tel. +41 (0)58 888 5256 About Julius Baer The Julius Baer Group is the leading Swiss private banking group, with an exclusive focus on servicing and advising private clients. Julius Baer s total client assets amounted to CHF 269 billion at the end of June 2012, with assets under management accounting for CHF 179 billion. Bank Julius Baer & Co. Ltd., the renowned Swiss private bank with origins dating back to 1890, is the principal operating company of Julius Baer Group Ltd., whose shares are listed on the SIX Swiss Exchange (ticker symbol: BAER) and form part of the Swiss Market Index (SMI) of the 20 largest and most liquid Swiss stocks. Julius Baer employs a staff of over 3,600 in more than 20 countries and some 40 locations, including Zurich (head office), Dubai, Frankfurt, Geneva, Hong Kong, London, Lugano, Milan, Monaco, Montevideo, Moscow, Shanghai and Singapore. For more information visit our website at www.juliusbaer.com 4

The information in this media release may be subject to updating, completion, revision and amendment and such information may change materially. No person is under any obligation to update or keep current the information contained in this media release and any opinions expressed in relation thereto are subject to change without notice. This media release does not constitute or forms part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, or any offer to underwrite or otherwise acquire any shares in the company or any other securities nor shall it or any part of it nor the fact of its distribution or communication form the basis of, or be relied on in connection with, any contract, commitment or investment decision in relation thereto. Any such offer of securities would be made, if at all, by means of a prospectus or offering memorandum to be issued by the company. Any decision to purchase securities in the context of any offering should be made solely on the basis of information contained in the final form of any prospectus, offering memorandum or other document published in relation to such an offering and any supplements thereto. This media release does not constitute a prospectus pursuant to art. 652a and/or 1156 of the Swiss Code of Obligations or art. 27 et seq. of the listing rules of the SIX Swiss Exchange. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933 (the Securities Act ) and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act. There will be no public offer of the Securities in the United States, Canada, Australia and Japan. This media release includes forward-looking statements that reflect the Company s intentions, beliefs or current expectations and projections about the transaction described herein, the financing thereof, potential synergies and the Company s and the combined group s future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies, opportunities and the industry in which the Company operates. Forward-looking statements involve all matters that are not historical fact. The Company has tried to identify those forward-looking statements by using the words may, will, would, should, expect, intend, estimate, anticipate, project, believe, seek, plan, predict and similar expressions or their negatives. Such statements are made on the basis of assumptions and expectations which, although the Company believes them to be reasonable at this time, may prove to be erroneous. These forward-looking statements are subject to risks, uncertainties, assumptions and other factors that could cause the Company s or the combined group s actual results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies or opportunities, as well as those of the markets they serve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. Important factors that could cause those differences include, but are not limited to: actual amount of AuM transferred to the Company, which may vary from the expected AuM to be transferred; breakdown of client domicile of the actual AuM transferred, which may vary from the breakdown based on preliminary data; delays in or costs relating to the integration of the Merrill Lynch International Wealth Management business, limitations or conditions imposed on the Company in connection with seeking consent from regulators to complete the acquisition, changing business or other market conditions, general economic conditions in Switzerland, the European Union, the United States and elsewhere, and the Company s ability to respond to trends in the financial services industry. Additional factors could cause actual results, performance, or achievements to differ materially. The Company, the Merrill Lynch International Wealth Management business and each such entity s directors, officers, employees and advisors expressly disclaim any obligation or undertaking to release any update of or revisions to any forward-looking statements in this media release and any change in the Company s expectations or any change in events, conditions or circumstances on which these forward-looking statements are based, except as required by applicable law or regulation. Without prejudice to the foregoing, it should be noted that certain financial information contained in this media release is unaudited and/or is presented on a pro forma basis. The assets under management numbers for the IWM as of 30 June 2012 are preliminary unaudited numbers and are therefore subject to change. The unaudited pro forma financial information contained in this media release has been prepared based on the Company s historical unaudited financial information and the Merrill Lynch International Wealth Management business s historical unaudited financial information and does not include any pro forma adjustments. The unaudited pro forma financial information has been prepared for illustrative purposes only and, because of its nature, may not give a true picture of the financial position or results of operations of the combined group that will be achieved upon completion of the transaction. Furthermore, the unaudited pro forma financial information is not indicative of the financial position or results of operations of the combined group for any future date or period. 5

Management Structure of Julius Baer Group Ltd. Valid as of Principal Closing Board of Directors Chairman D. J. Sauter Julius Baer Group CEO B. F. J. Collardi Private Banking Representative Chief Financial Chief Operating Chief Risk Chief Communications General Counsel B. Keller D. A. Enkelmann G. F. Gatesman B. Hodler J. A. Bielinski C. Hiestand 1

Management Structure of Bank Julius Baer & Co. Ltd. Valid as of Principal Closing Board of Directors Chairman D. J. Sauter Bank Julius Baer CEO B. F. J. Collardi CEO Office S. Bodenehr Human Resources S. Hux Integration N. Dreckmann Communication and Marketing J. A. Bielinski (2) Switzerland G. Flury (1) Northern and Eastern Europe G. A. Rossi (1) Southern Europe, Middle East and Africa R. Bersier (1) Latin America and Israel G. Raitzin (1) Asia M. Benz (Chairman) T. R. Meier (Head) (1) External Asset Managers and Custody Y. Robert-Charrue (1) Markets P. Gerlach (1) Investment Solutions Group H. Lauber (1) Chief Operating G. F. Gatesman (1)/(2) Chief Risk B. Hodler (1)/(2) Chief Financial D. Enkelmann (1)/(2) (1) Member of the Executive Board of Bank Julius Baer & Co. Ltd. (2) Member of the Executive Board of Julius Baer Group Ltd. 2