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Credit Suisse to merge banks

Swiss financial institution Credit Suisse Group has announced that it is to merge its four private banks from the start of 2007, in an effort to boost profits.

The banks, Clariden Bank, Banca di Gestione Patrimoniale, Bank Hofmann and Bank Leu, will merge with the securities dealer Credit Suisse Fides to create a new single autonomous bank to be called Clariden Leu.

The new bank will aim to cater for wealthy clients banking in Switzerland, and will have about $88 billion worth of assets under management.

The merger is designed to bring together Credit Suisse's private banking, investment banking and asset management businesses, a move that aims to reduce overlap, and is expected to bring an increase in profits of about $79 million a year.

Walter Berchtold, who will head the new Clariden Leu bank, said that the merger was a "strategic move".

"Clariden Leu will become one of the leaders in the Swiss private banking business," he said.

"Moreover, it will have the critical mass in all market areas to invest in the continued expansion of its international business and play an active role in the ongoing consolidation process in this sector."

The merger will go ahead subject to regulatory approval.