UBS and Credit Suisse exploring possible merger - report

Swiss lenders UBS and Credit Suisse are allegedly exploring a possible tie-up, in a move that would create one Europe’s biggest banks, it was reported on Monday.

According to Zurich's Inside Paradeplatz, citing unidentified sources within both banks, the project - codenamed Signal - is being led by the chairmen of UBS and Credit Suisse, Axel Weber and Urs Rohner.

Inside Paradeplatz said Weber was driving the project and had already discussed it with Swiss finance minister Ueli Maurer. An agreement could happen by early next year, it added.

Both lenders have declined to comment.

Credit Suisse and UBS, the world’s biggest wealth manager, are long-standing rivals. However, the Covid-19 pandemic has intensified the pressure for consolidation within the European banking sector, which is already dealing with record low and negative interest rates.

As at 1230 BST, shares in UBS were ahead 1% and Credit Suisse 2%.

Inside Paradeplatz said a merger could result in job cuts of around 15,000 worldwide, or between 10% and 20% of the workforce. Weber is being slated as chairman of the combined group, which would mean the chief executive would likely come from Credit Suisse.

Credit Suisse named the head of its domestic business, Thomas Gottstein, chief executive earlier this year after Tidjane Thiam resigned.

Thiam was ousted after it emerged that Credit Suisse has paid a corporate espionage firm to follow Iqbal Khan, the former head of its wealth management division, while on gardening leave. Khan, who quit to become co-head of UBS’s wealth management division, was said to have fallen out personally with Thiam.