* Pictet and Lombard both switch to corporate partnership
* Partners' liability will be limited
* Banks will face tougher reporting requirements
* Odier says move not a prelude to stake sale or listing
By Martin de Sa'Pinto and Tom Miles
ZURICH/GENEVA, Feb 5 Switzerland's two largest privately held banks will reorganise their businesses to limit partners' liability and increase transparency, a month after the sudden collapse of their oldest rival after intensifying regulatory pressure.
In separate statements on Tuesday, Geneva-based Pictet and cross-town rival Lombard Odier both said they would become corporate partnerships limited by shares from Jan 1, 2014, giving them the French abbreviation "SCA" after their names.
Both banks ascribed the move to the need to adapt their structure to help them develop, without mentioning that Swiss banking faces its biggest crisis in generations or that longstanding rival Wegelin was forced to shut last month after pleading guilty to helping wealthy Americans evade taxes.
Swiss banks are facing a regulatory assault from authorities in the United States and European Union, who suspect them of helping their citizens salt away billions in untaxed income.
Switzerland has so far failed to negotiate a truce, making many Swiss bankers wonder how they should operate in future.
By changing to a corporate partnership, the partners at Pictet and Lombard - eight at each bank - are removed from personal liability.
Instead, the banks' liabilities will be set against their equity, which is well in excess of Swiss regulatory requirements in both cases.
"The transformation into a corporation will ease expansion into foreign countries where the Swiss partnership structure often contravened local rules and was difficult to explain to foreign regulators," said Lombard Odier senior partner Patrick Odier in a telephone interview.
"We have sometimes had to renounce opening branches because of this."
Odier was quoted by Geneva-based newspaper le Temps as saying the move was neither a step towards a stock market listing, nor a chance to sell equity in the bank to a third party. "This is not about guarding against external problems," he said.
Pictet Group senior partner Jacques de Saussure said both banks had been considering a change in group structure for several years as the result of their gradual expansion abroad and growth into new businesses like asset management.
De Saussure said the new holding company structure had the benefits of a Swiss general partnership, leaving the banks as private companies whose overall control lay with the partners, but was more easily accepted by foreign regulators.
"The group's structure will also gain in consistency as well as clarity and transparency, especially for clients, with the publication of a consolidated annual report and the introduction of an independent supervisory board as required for an SCA," Pictet said in a statement.
Pictet and Lombard Odier, whose competitors include listed rivals Julius Baer and Bank Sarasin, currently have several dozen subsidiary companies under the private partnership. The new structure will put all the group businesses under a holding company structure.
Founded in 1796, Lombard Odier had assets under management of more than 160 billion Swiss francs ($176.1 billion) at the end of 2012, while Pictet, established nine years later, managed well in excess of 250 billion francs for clients. ($1 = 0.9086 Swiss francs) (Editing by David Holmes)