Credit Suisse Stops Some Japan Bond Underwriting

(Bloomberg) -- Credit Suisse Group AG has stopped underwriting certain types of bonds in Japan, a business that offered only limited profits for the Swiss bank given the low number of deals it handled, according to a person familiar with the matter.

The operations have had minimal staffing in the past few years, and have worked with the assistance of the investment banking group, said the person, who asked not be identified because the matter is private.

Credit Suisse has stopped underwriting Japan Housing Finance Agency’s residential mortgage-backed securities, in which it was active until the fiscal year ended March 31, and has also informed syndicates for Japanese regional government bond sales that it’s discontinuing such operations, the person said.

The Japan market is an important part of its strategy to further expand its franchise in Asia Pacific, according to an emailed response by Credit Suisse to questions from Bloomberg. Its Japan underwriting and advisory business remains active, with a healthy pipeline across key products including debt capital markets, equity capital markets and mergers and acquisitions, the bank said.

The Zurich-based bank’s suspension of some Japanese debt underwriting comes as rival Societe Generale SA establishes a debt capital markets desk in the country to help companies raise funds overseas.

In the Asia-Pacific region more widely, Credit Suisse this month tasked Yves-Alain Sommerhalder with overseeing cross-selling with the bank’s millionaire wealth management clients. The bank will also take a majority stake in its Chinese securities joint venture to bolster its presence in the country.

Credit Suisse is stopping underwriting notes guaranteed by the Japanese government as well, according to the person. The firm had a 0.05 percent market share in Japanese corporate bond underwriting in the year ended March 31, excluding self-led deals, according to data compiled by Bloomberg.

To contact the reporter on this story: Issei Hazama in Tokyo at ihazama@bloomberg.net

To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Ken McCallum, Beth Thomas

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