Credit Suisse, UBS held tie-up talks backed by both chairmen

[ZURICH] The chairmen of UBS and Credit Suisse supported a merger of equals between Switzerland's two largest banks during discussions earlier this year, Swiss magazine Bilanz reported on Wednesday, adding talks had since stagnated.

The details reported by finance periodical Bilanz suggest that a merger between Credit Suisse and UBS, which had been examined by staff working under UBS chairman Axel Weber in recent months, had been more seriously considered than previously known, receiving backing from both parties.

Both UBS and Credit Suisse declined comment.

Switzerland's two biggest banks held tie-up negotiations in the first half of the year, Bilanz reported, citing two unnamed sources involved in the discussions.

Although kept secret, a merger had been considered seriously, one source told Bilanz, receiving the backing of both UBS Chairman Axel Weber and Credit Suisse Chairman Urs Rohner, who is due to retire from his post in 2021.

However, discussions had dropped off since the summer holidays, one source told Bilanz, amid a drop in Credit Suisse's share price placing the banks' respective valuations beyond the merger of equals threshold.

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Reuters reported last week that the board of UBS had gathered to discuss strategy, but a merger with Credit Suisse was not on the official agenda, suggesting cooling interest in the idea.

Both chief executives of UBS and Credit Suisse expressed expectations of an up-tick in consolidation within Europe's banking sector at a conference on Tuesday, with UBS CEO Sergio Ermotti calling more deals "inevitable".

REUTERS