UBS has received provisional approval from EU antitrust regulators to complete its acquisition of Credit Suisse, the European Commission said on Tuesday. But the deal still needs regulatory approval under EU merger rules.

Last month, UBS bailed out Credit Suisse in a merger engineered and financed by the Swiss authorities.

Under EU merger rules, companies must obtain approval from EU antitrust regulators before they can complete a deal or face fines of up to 10 per cent of their total turnover.

Eu antitrust regulators said the two Swiss banks had applied to be exempt from the standstill obligation.

"At the request of UBS and Credit Suisse, the Commission has exempted them from their standstill obligations under Article 7 (3) of the EU M&A Regulation," the Commission said in an email.

"The Commission considered that the transaction met the obligation relaxation requirements, and as such it approved the conditional relaxation request of the two banks on April 4, 2023," the commission said.

The two banks have yet to formally submit an application for EU approval for the deal. Such applications will require 25 business days for preliminary review of the transaction.