Credit Suisse To Put its China Division Up For Acquisition

Due to rival UBS's acquisition of the Swiss bank, Credit Suisse and a joint venture partner are looking for purchasers for their China securities brokerage business, according to two people with direct knowledge of the situation.

They said that Citigroup has previously expressed interest in acquiring Credit Suisse Securities China (CSS).

Citi is establishing a securities brokerage in China, and its CEO Jane Fraser visited there this past week. One of the persons stated that although it had planned to accelerate growth through an acquisition, it ultimately chose to stay with its original strategy of organic business growth.

Chinese securities laws prohibit a single entity from having two licences for brokerages that it owns a majority of. In a successful securities partnership with Beijing State-owned Asset Management, UBS holds a 67% share.

Credit Suisse agreed to buy out its partner Founder Securities last year and currently owns 51% of the losing CSS. Chinese regulators have not yet given their clearance to the transaction.

A spokeswoman for CSS and Credit Suisse declined to comment, as did UBS. Citi opted not to respond.

The China Securities Regulatory Commission and Founder Securities did not immediately respond to requests for comment.

When CSS was founded in 2008 in Beijing, Credit Suisse initially held a 33.3% investment before increasing its holdings to 51% in 2020. It has licences to perform underwriting, sponsoring, proprietary trading, and acting as an investment consultancy in addition to brokering.

According to its annual report, it recorded a net loss of 254 million yuan ($36 million) in 2022 and had 234 employees at the end of the previous year. It was unable to determine the business's prospective deal value right away.