UPDATE 2-Sarasin ups NZB stake, focuses on brokerage

* Sarasin already had 40 pct, aims to boost confidence

* NZB CEO steps down after regulator investigation

* NZB to withdraw from private banking

* No price disclosed

* Sarasin shares drop 0.6 pct

(Adds details, background)

By Katie Reid

ZURICH, Nov 3 (Reuters) - Switzerland's Bank Sarasin (BSAN.S) plans to raise its stake in Zurich-based NZB Holding after a probe by the Swiss financial watchdog forced NZB's chief to step down and undermined client confidence.

Bank Sarasin said on Tuesday it intended to raise its stake in NZB to between 51 and 60 percent, from 40 percent, without disclosing a price.

"The purpose of the acquisition is to boost the confidence of staff and clients in NZB," Bank Sarasin said in a statement.

Swiss regulator FINMA called for personnel changes at NZB following an investigation into how the broker, ZKB and Deutsche Bank (DBKGn.DE) helped Russian and Austrian investors to secretly build up a some 31 percent stake in Switzerland's Sulzer (SUN.S) in 2007.

"All three banks aided and abetted the investors in secretly building their stake in Sulzer," FINMA said in a statement.

NZB -- already rocked this year by the indictment of one of its bankers for helping wealthy Americans hide assets from tax authorities -- will withdraw from private banking. [ID:nLL370481]

Bank Sarasin will instead focus NZB's business on its brokerage operations and NZB's Chief Financial Officer Frank Gut will take over as CEO from co-founder Martin Eberhard with immediate effect.

INVESTIGATION