The Swiss bank, which has suffered from losses and mishaps, including exposure to failed New York-based hedge fund/family office Archegos, is restructuring its business and offloading parts of its empire.

Credit Suisse which is restructuring its business in a battle back toward profitability, today said it has agreed to sell a “significant part” of its securitized products group (SPG) and related business to Apollo Global Management.

The Zurich-listed bank, which recently logged a third-quarter loss and announced a SFr4 billion ($3.99 billion) capital-raising plan, said today’s agreement represents an important step toward selling off its securitized products business. The move is designed to remove a large amount of risk from the business and release capital for other projects.

The Apollo transaction, together with the contemplated sale of other portfolio assets to third-party investors, is expected to reduce SPG assets from $75 billion to about $20 billion, through a series of transactions expected to be completed by mid-2023, the bank said in a statement. 

Credit Suisse said that completing the transactions will achieve a release of up to $10 billion in risk-weighted assets (RWAs), depending on how many assets are transferred.

The bank said that Apollo expects to hire most of the SPG team and receive customary transitional services from Credit Suisse once the transaction is completed so that clients have a “seamless experience.” Credit Suisse will also provide financing for a portion of the assets transferred to Apollo, the bank said.

Credit Suisse expects its Common Equity Tier 1 capital ratio to be strengthened by the deal with Apollo, which is expected to close in the first half of 2023, subject to approvals from regulators and clients, and customary closing conditions.