Zurich Crisis torn apart creditswiss It has cleared an important hurdle in the planned rationalization of the investment banking division. The major Swiss bank has signed a definitive agreement to sell a significant portion of its securitization business (Securitized Products Group) to US financial investor Apollo Global Management, Credit Suisse announced Tuesday. The institute had already announced the deal, which also includes other financing deals, at the end of October.
The bank did not say the sale price. Analysts predict a value in the billions. Vontobel expert Andreas Vendetti explained that important financial details were missing to evaluate the transactions. It seems that some details have not been finally clarified. He also indicated that some risks still exist on the balance sheet of Credit Suisse.
As part of a shift in strategy, Zürcher Bank wants to exit large parts of risky and capital-intensive investment banking and focus primarily on business with wealthy private clients abroad and retail and corporate clients in Switzerland. The sale of Apollo’s securitization business is expected to be completed in the first half of 2023.
Other areas are set to go to third-party investors, with the company’s assets shrinking to about $20 billion by mid-2023 from the last $75 billion. Apollo will manage the remaining assets for five years under the terms of the agreement. Credit Suisse expects Apollo to take on most of the staff.
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Investors and acting advisors are wondering what role the Blythe Masters board of directors will play in the deal. Masters has been an advisor to Apollo since 2021 and co-founded an investment firm in which Apollo has a stake. Credit Suisse said the bank had taken precautions to avoid potential conflicts of interest.
more: “Historic moment”: Credit Suisse announces billions in losses and a radical restructuring