ZURICH, June 24 (Reuters) - As Credit Suisse fades into

history following its takeover by UBS last year, global banks

are expanding in Switzerland to take advantage of companies'

desire to spread their business.

France's BNP Paribas, Deutsche Bank and

U.S. lenders Citi and Bank of America ( BAC ) are among

those increasing staffing and courting smaller companies that

form the bedrock of the Swiss economy.

"When one player is absorbed, the musical chairs are being

rearranged and that creates opportunities," said Enna Pariset,

who heads BNP's Swiss operations. "Sometimes you're lucky."

Still, it is far from clear whether their gradual expansion

will seriously challenge UBS, whose market strength is already

making some firms uneasy, and has caused concerns at the Swiss

competition watchdog COMCO.

Credit Suisse, which unravelled after a string of scandals,

was long regarded by Swiss industry as the natural partner for

business in a banking landscape it dominated alongside UBS.

"Shortly after the collapse of Credit Suisse, corporates

immediately opened discussions with foreign banks like us," said

Jürg Hobi, head of Citi's Swiss commercial banking arm.

Citi, which in September 2022 began serving smaller local

firms with international business, was benefitting from concerns

about over-dependency on a single bank and a shortage of credit,

Hobi said.

Today, Citi employs eight staff in Swiss commercial banking,

and aims to double that by 2028.

Nicola Tettamanti, president of Swissmechanic, which

represents small and medium-sized industrial companies in

Switzerland, welcomed the moves by foreign banks, although he

said the benefits might take some time to filter down.

"As a fan of competition I am quite comfortable with more

players in the market, which will lead to improved services and

better prices," he told Reuters.

"I think they will focus on the big companies first, but the

smaller companies will eventually see the benefits after the

banks have built up their business," added Tettamanti, who also

wanted Swiss banks to do well abroad.

COMPETITION FEARS

At Deutsche Bank, 50 people work at its Swiss corporate

banking arm, 10% more than at the start of 2023, said Veronique

Voser, head of the unit for Germany, Switzerland and Austria.

The fall of Credit Suisse helped to convince the German bank

to expand in Switzerland and take on businesses with annual

turnover of at least 500 million Swiss francs ($560 million),

she said.

"We managed both to win new business and increase our

business volumes with existing customers," Voser said, pointing

to double-digit revenue growth in 2022 and 2023.

But UBS, easily Switzerland's biggest bank, looms over them

all.

Choice for retail banking clients, for the wealthy and for

large corporations like Nestle, Roche and

Novartis may still be broad - but smaller firms feel

less comfortable.

"In terms of the loans financing, I've seen instances

where competitors have been increasing pricing and the clients

have asked us to step in as an alternative", said BNP's Pariset.

Swiss financial regulator FINMA last week said the

UBS-Credit Suisse takeover had not created competition worries,

despite concerns flagged by antitrust authority COMCO.

COMCO said the deal warranted a deeper review and that there

were no "fully-fledged alternatives" in corporate banking to

UBS, urging authorities to encourage "effective competition".

Asked about the competitive landscape, a UBS spokesperson

pointed to previous statements from the bank in which it has,

among other things, rejected criticism about its size.

UBS's Switzerland boss, Sabine Keller-Busse, told the Neue

Zuercher Zeitung newspaper this month that rival banks had been

looking to poach its clients ever since Credit Suisse failed.

Brooke Wachtel, Bank of America's ( BAC ) head of corporate banking

in Switzerland, said the window of opportunity was closing.

"Corporates are seeking new banking partners and are expected to

fill this gap within the next 12 to 18 months," she said.

Mainly serving firms with sales upwards of 200 million

francs, BNP has risen to become number two in the Swiss

franc-denominated bond market, and wants to move into share

buybacks, said country head Pariset.

BNP saw opportunities among smaller exporters, Pariset

added, noting it had hired some 50 staff in corporate and

investment banking since 2022 - about a dozen of them from

Credit Suisse.

($1 = 0.8935 Swiss francs)