Napoleon's Swiss bank merges with rival

Two of the oldest names in Swiss private banking are merging to win more business and cut costs as competition from bigger international rivals intensifies.

Lombard Odier and Darier Hentsch both have histories dating back to the 18th century. Darier Hentsch was one of Napoleon Bonaparte's bankers and Lombard helped found the Swiss National Bank. The merger will create a bank with $89bn (£63bn) in assets, narrowing the gap to Pictet & Cie, Geneva's biggest private bank. It will also allow them to reduce costs by cutting some of the 2,000 jobs.

Geneva-based banks, which have attracted a quarter of the $2.4 trillion (£1.7 trillion) of assets deposited in Switzerland by promising discretion and 200 years of experience, have seen their earnings fall as rivals with more capital such as Deutsche Bank expanded in a country famous for its banking secrecy laws.

Swiss-based banks have about a third of the world's offshore assets under management, according to the local bankers' association. As banking secrecy laws are being loosened following international criticism over suspect accounts, the country's traditional private banks are losing some of their allure.

The new company, Lombard Odier Darier Hentsch & Cie, or LODH, will remain a limited partnership. Lombard Odier, Darier Hentsch and Pictet are all unlisted private partnerships, in which the partners are personally liable. Clients with at least 1 million Swiss francs (£455,000) to invest have held accounts with them for generations.