(Bloomberg) -- UBS Group AG will keep Credit Suisse’s domestic bank and fully integrate it, overriding local criticism that a merged entity will hold excessive sway over the country’s financial system.

UBS and Credit Suisse will continue to operate separately in the country until their legal merger next year, UBS said in a statement Thursday. The lender will keep using the Credit Suisse brand and operations until it has moved the former rival’s clients onto its own systems, which is expected to happen in 2025, it said.

The decision “follows a thorough evaluation of all options,” Chief Executive Officer Sergio Ermotti said in the statement. “Our analysis clearly shows that full integration is the best outcome for UBS, our stakeholders and the Swiss economy.”

The Swiss business has been Credit Suisse’s crown jewel, a profitable anchor while the rest of the firm lurched from crisis to crisis over the past years. UBS had long signaled its preference to keep it, but political concerns about its potentially dominant role at home had complicated the decision. The decision to integrate it was made easier after UBS voluntarily gave up a safety net provided by the government. 

Bloomberg previously reported that UBS was poised to integrate the Swiss bank and planned to wind down the Credit Suisse brand in the country. 

UBS plans to cut 3,000 jobs in Switzerland through forced redundancies, with additional headcount reductions expected from voluntary departures. About 1,000 job cuts are the direct result of the decision to integrate Credit Suisse’s Swiss unit. 

The integration creates a domestic giant in Switzerland, with analysts at Citigroup previously estimating that the new bank would account for about 35% of domestic deposits, 31% of corporate loans and 26% of mortgages. It will compete with banks such as Raiffeisen and ZKB, a cantonal lender, as well as more than 200 other firms. 

“Competition in the Swiss market remains robust across all our business activities,” UBS said in the release Thursday. “The cantonal banks in aggregate will continue to have the highest market share in all relevant personal and commercial banking products.”

Ermotti said on a call with analysts that he wants to maintain the combined entity’s domestic market share and perhaps even win back some lost by Credit Suisse in recent quarters. He acknowledged that task is complicated because some clients may be wary of “concentration risk.”

Analysts have pointed out that Credit Suisse’s local business, the Swiss Universal Bank, is probably worth a multiple of the price UBS paid for the whole of its stricken rival. The bank was the leader in Swiss domestic investment-banking activity in terms of deal value for at least a decade.

(Updates with Ermotti comments in penultimate paragraph.)

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