Credit Suisse Group AG, Switzerland’s second-biggest bank, is considering selling additional stakes in an electronic interest rates trading unit it set up last year, according to a person briefed on the plan.
Electronic platform Wake USA LLC is a joint venture between the bank and high-frequency trading firm Tower Research Capital LLC for US Treasuries and other fixed-income products, according to a regulatory filing showing that the unit gained approval to operate earlier this year.
Credit Suisse is in the process of moving clients over to that unit and may sell part of its majority stake to reduce capital requirements, said the person, who asked to remain anonymous because sale talks are preliminary.
Like many of its biggest rivals, Credit Suisse is seeking to adjust its fixed-income trading operations as more of that business is conducted electronically and new capital rules limit the leverage that banks are allowed to have in those units.
The Zurich-based bank generated US$1.67 billion in fixed-income trading in the first quarter of the year, down 25 percent from a year earlier.
Credit Suisse has transferred about 25 percent of its electronic rates trading business into Wake, the source said, adding that while the business currently focuses on US Treasuries and related products, it can be expanded into other areas of fixed-income instruments.
The plan was reported on Sunday by the Financial Times and the person said Credit Suisse has held preliminary talks with investors such as Voltaire Capital.
Asset management firm Voltaire Capital has arranged more than US$300 million of capital from high-net-worth individuals for investments in market-making businesses, Risk.net reported earlier this month.
The Financial Times also reported Credit Suisse is set to pull in significantly more than US$100 million from the impending stock market listing of Chinese e-commerce giant Alibaba Group (阿里巴巴) after disclosing a US$50 million bond investment it made in 2012.
The Swiss bank is one of six underwriting Alibaba’s initial public offering in New York, but the money it receives in fees would be doubled by the return from bonds.
The report said that should Alibaba float at US$121 billion — a conservative estimate according to some analysts — Credit Suisse would earn about US$66 million in fees and net another US$68 million from the investment it made during an earlier round of funding.
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