UBS Group offloaded $8 billion worth of assets to Apollo Global Management, in an effort to pare down its non-essential offerings.
The Swiss bank said Wednesday that it entered into an agreement with the U.S.-based asset management giant to sell $8 billion of “senior secured financing facilities,” as UBS seeks to wind down and simplify what it calls its “non-core and legacy” portfolio.
The renegotiated agreement also marks the full independence of Atlas, officially ending an investment management agreement that was first established between Apollo and Credit Suisse in February 2023 that became a source of contention following Credit Suisse’s absorption by UBS last June.
UBS is projecting a $300 million windfall in the first quarter of 2024 from the sale, while Credit Suisse is estimated to book a $900 million loss.
UBS CEO Sergio Ermotti said the mutual agreement with Apollo is another step towards the bank’s efforts to free up capital and reduce costs and complexity. For Apollo’s part, CEO Marc Rowan said the company was pleased with Atlas’ completed transition and the “economically neutral” deal.
UBS scooped up its competitor, Credit Suisse, last year for 3 billion Swiss francs ($3.25 billion) in the largest such deal since the 2008 financial crisis. Switzerland’s government arranged the takeover over concerns that Credit Suisse’s failure could domino into an international financial crisis.
The process to absorb Credit Suisse entirely into UBS’ system, which began some nine months ago, could take as many as three to five years, the bank cautioned at the outset of the takeover. Together, UBS and Credit Suisse oversee $5 trillion in assets.
UBS stock climbed 0.45% on Wednesday morning following the announcement, a sign that the deal was welcomed by investors and that there is confidence around its management of the Credit Suisse absorption.