All private banking activities will be grouped and listed under Julius Baer Group, while hedge fund arm GAM and US asset management unit Artio and Asset Management Europe will be combined into GAM Holding, the Swiss-listed firm said in a statement.

The bank said it still plans an initial public offering of Artio in 2009 once market conditions permit.

"In light of the challenges that many financial services business models are confronted with currently, we are convinced that both entities will benefit from their sharpened focus and the absence of competing interests," chairman Raymond Baer said.

The transaction is expected to be completed during the third quarter of 2009. Julius Baer said the move is not expected to cause job cuts.

“As a leading pure-play private banking group, Julius Baer Group will stand to benefit from private clients' increasing level of demand for the services of an independent, strongly capitalised and fully dedicated private banking franchise,” the firm said.

“This Group will maintain the expansion of its international network and complete the shift of its services and product model towards a unique, fully fledged 'open architecture' philosophy, allowing for a truly unrestricted choice of the best services and products available for the benefit of its clients,” it continued.

Commenting on the asset management business, the statement said: “GAM Holding will be a leading active asset manager, offering a broad, well diversified range of equity and fixed income investment funds, discretionary portfolio management services and alternative investments. As a stand-alone entity, the business will be able to accelerate the development of its international institutional and US distribution franchise.”