The takeover of Credit Suisse by UBS has the industry in Asia wondering about what’s going to happen to one of the most successful elements of CS’s book: its expertise in structured private lending. Few are watching developments more closely than the two other international banks that are most active in this space: Deutsche Bank and Barclays.
Credit Suisse was renowned for its work in this area, particularly in southeast Asia and most obviously Indonesia. For years it has eschewed the league table credit of investment grade public deals – big on profile but light on fees – in favour of the innovative use of the balance sheet, developing creative and sometimes complex solutions that are opaque, because they are private, but lucrative. It has been an extremely successful approach.
The received wisdom is that UBS will have limited appetite for deals like these. It hasn’t been known for them in the past and is unlikely to switch its risk position significantly now. So if that happens, who steps into the gap?
The other bank most closely associated with this niche is Deutsche. “Our private financing business is a significant part of our investment bank, globally and in Asia,” says Amit Khattar, head of investment bank Asia Pacific and co-head of global financing and credit trading Apac.
