HSBC needs cash, urgently. It has agreed to a sell a mortgage portfolio to Credit Suisse to improve liquidity.
A U.S. mortgage division of Credit Suisse (CS) has agreed to buy a mortgage portfolio for $3.4 billion from HSBC, the British-Chinese bank said in a statement last night.
The transaction is part of a strategy to reduce the business with private mortgage loans, the company added in the statement.
Debt Payback
The mortgages will be moved to DLJ Mortgage Capital, a unit of CS, from HSBC Finance Corporation and HSBC Bank U.S., according to the statement.
HSBC will use the money it received for the portfolio to pay back debt, the bank said. It had shocked investors with a result for 2016 that was substantially below expectations.
Second Such Deal
The portfolio, which has a value of about $3.23 billion, generated a pretax profit of $48 million last year. HSBC estimates to make an accounting profit of $150 million before tax from the sale.
HSBC earlier this week announced it had sold a further portfolio of U.S. mortgages to CS, valued at $1.5 billion. The transaction was closed on Febraucry 23.
