Apollo, Pimco in talks to buy Credit Suisse assets

A man walks next to a branch of Credit Suisse in Bern, Switzerland. — AFP

NEW YORK: Credit Suisse Group AG, lining up the pieces of a sweeping overhaul, is in advanced talks with a group of investing giants including Apollo Global Management Inc to sell at least part of its securitised products business, according to people with knowledge of the matter.

The coalition of potential buyers also includes fund manager Pacific Investment Management Co (Pimco), the people said, asking not to be identified because the matter isn’t public.

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 yesterday.

The structure of the potential deal is unclear. No final decision has been made and the talks could fall through, the people added. Representatives for Apollo, Pimco and Credit Suisse declined to comment.

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 firm will have to turn to investors that it’s already tapped for US$12bil (RM56.4bil) 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’s also made a couple of other disposals, including selling its stake in fintech Allfunds Group Plc.

The securitised products group (SPG), led since 2016 by New York-based trader Jay Kim, 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 “securitise” 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 only flagged openness to third-party capital for the SPG unit, said last month that it’s also considering other asset sales as it seeks funds to help pay for the restructuring. — Bloomberg