Credit Suisse’s SPG unit draws interest from both Apollo, BNP

Bloomberg

Apollo Global Management Inc and BNP Paribas SA are among investors showing interest in acquiring at least part of Credit Suisse Group AG securitised products group, people with knowledge of the matter said.
The Zurich-based firm is
exploring deals to sell the entire business, while potential investors may pitch to acquire specific portfolios or risk classes, the people said, asking not to be identified because the matter is private. Credit Suisse previously said that it’s looking for third party funds for the unit, which is profitable but uses a lot of capital.
The bank is still considering other options for the business and no final decisions have been made, the people said. Executives have said they’d like to keep some of the revenues, rather than an overall sale.
Credit Suisse announced a plan to attract investors to
the SPG business alongside a broader strategic review after a string of losses under former Chief Executive Officer Thomas Gottstein. That review is set to conclude next month in a restructuring that will likely see further cuts to the investment bank and elimination of thousands of jobs.
Credit Suisse has already sent out information on the trading business to potential bidders and is opening a data room in coming weeks to give greater detail about the unit, the people said. A sale could lead to the release of regulatory capital and potentially some cash proceeds, the people said. “We have said we will update on progress on our comprehensive strategy review when we announce our third quarter earnings,” Credit Suisse said.
The Swiss bank is looking to attract capital at a time when Wall Street competitors such as Citigroup Inc and JPMorgan Chase & Co are signalling a
significant drop in dealmaking and advisory revenue. Citigroup Inc CFO Mark Mason warned the fees his bank collects from deal making and capital markets origination are likely to plummet 50%, in line with the broader slowdown hitting Wall Street. Back in Europe, BNP Paribas has been a beneficiary in recent years of the decision by other European banks to exit or slim down certain businesses.
It took over the prime brokerage unit of Deutsche Bank Group AG after the German bank decided to exit equities as part of its own overhaul. Last year, Credit Suisse also referred prime brokerage clients to the French lender as part of an exit from the lucrative yet risky business, after losing billions in the collapse of US family office Archegos Capital Management.
The SPG business, overseen since 2016 by trader Jay Kim, buys and sells securities that are backed by pools of mortgages and other assets, such as car loans and credit-card debts.