Swiss private bank Julius Baer has raised its bid for unlisted Rabobank's stake in Swiss bank Sarasin and is now making an all-cash offer, a newspaper reported on Sunday, citing sources close to the matter.

"The management of Julius Baer has raised the offer, and Chairman of the Board Raymond Baer is now ready to pay Rabobank in cash for its majority stake in Sarasin," SonntagsZeitung reported without giving any figures.

Baer had initially offered to pay in cash and Julius Baer shares for the stake in Sarasin, a bank catering to rich clients, the newspaper said. Swiss cooperative lender Raiffeisen is also interested in acquiring a stake in Sarasin.

Julius Baer representative Jan Vonder Muehll declined to comment on the report.

SonntagsZeitung said Rabobank would make a decision on the sale by the end of this month.

Media have reported that Sarasin management favors a sale to Raiffeisen as it fears significant job cuts if Julius Baer takes control.

"A takeover by bank Baer would imply cutting up to 600 jobs," SonntagsZeitung quoted an involved banker as saying.

Sarasin shares closed at 31.70 Swiss francs on Friday, giving the bank a market capitalization of 1.6 billion Swiss francs ($1.85 billion) based on 51.6 million ordinary shares outstanding.

Rabobank owns 46 percent of Sarasin's capital and about 68 percent of the voting rights. It holds most of the bank's 57 million A shares, which have a multiple of voting rights compared to the bank's ordinary shares.

($1 = 0.888 Swiss Francs)

(Reporting by Silke Koltrowitz; Editing by Erica Billingham)