UBS chairman Axel Weber has reportedly prepared a wish list of possible partners for a potential merger, which includes names such as Deutsche Bank, BNP Paribas, and Credit Suisse.
Weber has been planning for different possible scenarios with executives during the bank’s recent annual strategy talks in Switzerland, reported Bloomberg.
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Earlier, the chairman weighed merger options with external consultants but has not raised the issue with the board of directors until now.
Weber considers a deal with Deutsche Bank among the most favoured scenarios, said the report citing a person familiar with the matter.
Deutsche Bank and UBS reportedly considered the merger option but the talks failed to gather enough steam to progress beyond the initial stage.
Differing views on each bank’s valuation was said to be the reason behind the termination of the talks.
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By GlobalDataUBS has a market valuation of CHF42.5bn, which is nearly triple compared to that of Deutsche Bank.
A potential deal with Deutsche Bank will deepen Weber’s German ties, who earlier worked as the president of German Bundesbank.
He was even considered for the role of CEO of Deutsche Bank.
Next week, Deutsche Bank will hold its annual strategy meeting where it could discuss about various M&A options.
Deutsche Bank chief Christian Sewing termed UBS the bank’s preferred medium-term option.
However, he will wait for the stock price of UBS to rise first, noted the report.
Spokespersons of UBS and Deutsche Bank refused to comment on the report.
Last week, Swiss finance blog Inside Paradeplatz reported about the possible merger of arch rivals UBS and Credit Suisse.
Weber consulted with Credit Suisse chair Urs Rohner, Swiss finance minister Ueli Maurer and financial watchdog Finma on the issue.
However, it is believed the amalgamation could face a stiff regulatory roadblock. It could also require additional capital and liquidity, thereby offsetting potential cost savings.
French banking group BNP Paribas is said to be a relatively stable option as its valuation is similar to UBS.
It could complement the Swiss bank’s asset and wealth management and investment banking businesses.
However, a BNP-UBS merger could face hurdles due to clashing corporate cultures.
Such a merger could also bear the brunt of UBS’ ongoing legal tussles in France and political resistance in France.
