ZURICH (Reuters) – UBS has sealed the sale of Credit Suisse’s securitised products business to Apollo Global Management as part of efforts to shed non-core assets after its takeover of the collapsed banking group.
Apollo will purchase $8 billion of “senior secured financing facilities”, UBS said on Wednesday, adding that it expects to make a net gain of about $300 million from the deal in the first quarter of 2024.
The agreement is a renegotiation of the deal Credit Suisse had reached with the U.S. buyout fund in the Swiss banking group’s last-ditch attempts at a revamp to avoid collapse.
“This mutually beneficial agreement aligns with UBS’s strategy of winding down and simplifying its non-core and legacy portfolio,” UBS said on Wednesday.
UBS Chief Executive Sergio Ermotti said the deal would free up capital from non-core activities and reduce costs and complexity in its business.
Credit Suisse had to be rescued in March last year in a government-sponsored operation.
Luzerner Kantonalbank analyst Daniel Bosshard said the Apollo deal was a sign that the Credit Suisse integration was going better than expected.
“The early praise is now very high, which is reflected in a sharp rise in the share price in recent months,” Bosshard said.
“This leaves little room for disappointment.”
UBS shares are up about 8% so far this year. They were down about 0.46% in early trading in Zurich on Wednesday.
In 2022, Credit Suisse had already begun the process of winding down its business of securitising products such as mortgages.
Under that plan, about $20 billion of remaining assets were to stay on the books of Credit Suisse but be managed by Apollo.
UBS will retain what is not being transferred to Apollo, a spokesperson for the bank said. The value of the former assets remaining with UBS was not immediately clear.
(Reporting by Oliver Hirt, Noele Illien and Gdansk Newsroom; Writing by Dave Graham; Editing by David Goodman and Jane Merriman)
