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UBS chairman explores merger with Credit Suisse

[ZURICH] The chairmen of UBS and Credit Suisse are exploring a potential merger to create one of Europe's largest banks, Inside Paradeplatz reported, citing unidentified people inside the two lenders.

The project, nicknamed Signal, is driven by UBS chairman Axel Weber, who is working on it with his counterpart at Credit Suisse, Urs Rohner, the blog said. Mr Weber has discussed the idea with Swiss Finance Minister Ueli Maurer and an agreement could happen by early next year, according to the report.

Spokesmen for the two banks declined to comment.

Europe's banking industry is under pressure to consolidate as the coronavirus pandemic adds to headwinds from negative interest rates. Spain's CaixaBank and Bankia are exploring a merger to form the largest lender in the country and kickstart consolidation in one of the hardest-hit European economies during the pandemic.

Mr Weber would probably stay on as chairman of the combined company, making it likely that the CEO would come from Credit Suisse, according to the report. Banking regulator Finma has been informed of the deliberations, Inside Paradeplatz said.

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A merger could result in job cuts equal to between 10 per cent and 20 per cent of the workforce, or 15,000 or more worldwide, according to the report.

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