The chairmen of UBS Group and Credit Suisse Group were exploring a potential merger to create one of Europe’s largest banks, wrote Inside Paradeplatz, citing unidentified people inside the two lenders.
The project, nicknamed Signal, is being driven by UBS Chairman Axel Weber, who is working on it with his counterpart at Credit Suisse, Urs Rohner, the Swiss finance blog said. Weber has discussed the idea with Swiss Finance Minister Ueli Maurer and an agreement could happen by early next year, according to the report.
A merger could result in job cuts equal to between 10% and 20% of the workforce, or 15,000 or more worldwide, according to the report. Banking regulator FINMA had been informed of the deliberations, Inside Paradeplatz said.
Europe’s banking industry is under pressure to consolidate as the coronavirus pandemic adds to headwinds from negative interest rates.
Shares in Credit Suisse had gained 4.4% and UBS 2.5% by 5pm on Monday. However, both shares have so far this year been down 23% and 7% respectively.