Julius Baer up after report of Credit Suisse takeover interest

ZURICH Fri Aug 29, 2014 4:49am EDT

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ZURICH Aug 29 (Reuters) - Julius Baer shares rose by more than 2 percent on Friday after a Swiss finance blog said the private bank could eventually become a takeover target for larger rival Credit Suisse.

Inside Paradeplatz website said, without citing sources, that Zurich-based Credit Suisse was looking at taking over the smaller bank, worth nearly $10 billion, as part of a number of options under consideration.

"There is no project name, and no high-ranking executives are talking about specific intentions. So it is a simulation game," Inside Paradeplatz said.

Julius Baer shares rose as much as 2.5 percent in early trading, compared with a 1.3 percent rise in the European banking sector. By 0820 GMT, the shares had pared some gains to trade up 1.5 percent, still outpacing a 0.4 percent rise in the European banking sector.

Credit Suisse and Julius Baer declined to comment.

Julius Baer is the fourth-largest private bank in Switzerland behind UBS and Credit Suisse, and Geneva-based Pictet & Cie. Baer manages 274 billion Swiss francs (299.26 billion US dollar) in assets.

An expected resolution to a U.S. tax evasion investigation into Swiss banks is expected to be a catalyst for consolidation in the country's private banking industry.

Credit Suisse settled its U.S. tax case in May for $2.5 billion, more than double what the bank had set aside for the purpose.

Julius Baer is still involved in a criminal investigation into its role in helping wealthy Americans evade their taxes, which it hopes to conclude by year-end.

The bank, which has done a number of M&A deals, is currently integrating its last big acquisition, Merrill Lynch's overseas wealth arm.

Earlier on Friday, Swiss private bank Notenstein said it was to buy about 1 billion francs of assets from Landesbank Baden-Wuerttemberg's (LLBW) Swiss wealth management arm.

(1 US dollar = 0.9156 Swiss franc) (Reporting By Katharina Bart. Editing by Jane Merriman)

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