: Credit Suisse weighing offers for securitized product unit sale: report

by | Oct 14, 2022 | Stock Market

Struggling Swiss bank Credit Suisse has reportedly received interest from Japanese lender Mizuho Financial Group to buy its securitized products unit, Bloomberg has reported, citing sources close to the matter. Mizuho
8411,
+1.30%

MFG,
+1.79%
is among other interested buyers such as private equity companies Apollo Global Management Inc. and Centerbridge Partners, investment management firm Pimco and global investment firm Sixth Street.

Credit Suisse
CSGN,
-0.09%

CS,
+6.59%
shares rose 1% in Zurich trade, but dropped 49% so far this year. Credit Suisse has been undergoing a restructuring of its business through a strategic review, which it plans to reveal alongside its third quarter earnings on Oct. 27. The bank didn’t respond to a request for comment. It told Bloomberg it was premature to comment before it updates on its comprehensive strategy review. The Swiss bank has been stepping up its efforts to sell or streamline key parts of the business as part of the review. Its securitized products group is one of its most profitable and had put it up for sale earlier this summer. The business sells securities backed by mortgages and other forms of debt. Bloomberg reported that the unit has around $20 billion in risk-weighted assets. The restructuring is down to a variety of issues plaguing the bank for a number of years. It lost billions of dollars from the collapse of two major firms – U.S. family office Archegos and U.K finance firm Greensill. It also reached a half a billion dollar settlement over a scandal involving loans made in Mozambique. Last week, the bank’s efforts to pare back from its poor health became more obvious after it announced a surprise $3 billion buyback of its senior bonds. On Tuesday, Credit Suisse’s rating was kept at sell by Goldman Sachs analysts, saying they view a capital shortfall of more than 5 billion francs ($5 billion). Meanwhile, short sellers have been building up short positions against the bank.

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