Rumors about a possible merger between the French and Italian banks have been doing the rounds for several years and have re-emerged after Jean-Pierre Mustier, a former investment banking boss at SocGen, was appointed earlier this year to run UniCredit.
This was highlighted on Monday by a report from Italian news agency Ansa which said talk of a tie-up was circulating in financial markets.
"It's market speculation that the bank does not intend to comment on," a UniCredit spokesman said when asked about the market rumors.
Societe Generale also said it did not comment on market rumors.
A source inside UniCredit told Reuters recently some managers at the bank believed Mustier's endgame was a tie-up with the French bank.
An investment banker at another bank also mentioned such a scenario. This banker said Mustier, who is expected to launch a share issue in the first quarter of next year, would likely raise more than the bank needed to increase its market capitalization with a view to a SocGen deal.
Such a tie-up could take place 12-18 months after the share sale, the banker said.
Two other sources close to the situation said a tie-up between the two banks was unlikely because of regulatory and constraints.
Banks in Europe face pressures to consolidate to help to tackle the problem of low profitability and heavy bad debts, but cross-border deals have always proved tricky.
Mustier, who took the helm of UniCredit in July, is considering tapping the market for 10 billion to 13 billion euros ($11 billion-$14 billion), four sources familiar with the matter said on Saturday.
That would be more than initial expectations for a 7 billion -8 billion euro cash call and would increase UniCredit's market value to between 24 billion and 27 billion euros. This compares with SocGen's current market value of about 32 billion euros, according to Thomson Reuters data.
UniCredit, which is also selling assets, is expected to announce the capital increase together with the results of a strategic review on Dec. 13.
UniCredit's shares spiked 5.6 percent higher after the Ansa report, but were flat by 1101 GMT. SocGen also rose more than 2 percent after the report before paring gains to stand about 1 percent higher.
Reporting by Gianluca Semeraro, Paola Arosio, Pamela Barbaglia and Maya Nikolaeva, writing by Silvia Aloisi. Editing by Jane Merriman