NEW YORK - Credit Suisse Group, lining up the pieces of a sweeping overhaul, is in advanced talks with a group of investing giants including Apollo Global Management to sell at least part of its securitised products business, according to sources with knowledge of the matter.
The coalition of potential buyers also includes fund manager Pacific Investment Management Co, the sources said.
Selling the profitable though capital-intensive business would be a key step for the Swiss lender looking to downsize its investment bank and help pay for other restructuring moves being unveiled on Thursday.
The structure of the potential deal is unclear. No final decision has been made and the talks could fall through, the sources added.
Credit Suisse is under pressure to persuade investors that its long-awaited strategy revamp can simplify operations and rejuvenate earnings after scandals and losses.
Shareholders have been focusing on whether the bank can rely on asset sales to cover the cost of the overhaul – or whether the company will have to turn to investors that it is already tapped for US$12 billion (S$16.9 billion) since embarking on the first in a series of turnaround efforts in 2015.
The bank has been trying, for example, to sell an almost 200-year-old luxury hotel in the heart of Zurich. It has also made a couple of other disposals, including selling its stake in fintech Allfunds Group.
The securitised products group buys and sells securities backed by pools of mortgages and other assets, such as car loans or credit card debt.
The division also provides financing to clients who want to buy these products and will “securitize” loans – dicing them into new securities of varying risk and return – on their behalf and sell them to investors for a fee.
The bank, which had initially flagged openness only to third-party capital for the SPG unit, said last month that it is also considering other asset sales as it seeks funds to help pay for the restructuring.
While the final costs will depend on a multitude of factors, including the number of job losses and business exits, the bank could be facing a capital shortfall of as much as 8 billion francs (S$11.4 billion), Goldman Sachs estimates.
Under chief executive Ulrich Koerner, Credit Suisse is also seeking outside capital for a potential spin-off of businesses including advisory, dealmaking and leveraged finance.
The bank is interested in an outside investor to take a partial stake in order to provide capital and help fund the costs of hiring and keeping talent, Bloomberg has reported.. BLOOMBERG
