Executives at Swiss bank UBS said on Wednesday that they’ve struck a deal to sell Credit Suisse’s U.S. servicing business. They did not provide information related to the buyers’ names or the financial details.
In the U.S., Credit Suisse owns Select Portfolio Servicing (SPS). According to Inside Mortgage Finance (IMF), SPS was the 20th-largest U.S. primary mortgage servicer at the end of June, handling $166.7 billion in unpaid principal balance (UPB). Meanwhile, the company’s owned servicing portfolio was $45 billion as of second-quarter 2024, good for No. 36 in the IMF ranking.
On Wednesday, UBS chief financial officer Todd Tuckner told analysts during an earnings call that the sale of Credit Suisse’s U.S. servicing business, expected to close in the first quarter of 2025, benefits the bank by reducing costs and lowering risk for its balance sheet.
CEO Sergio Ermotti added on a media call that a “consortium” acquired the business. Reuters first reported on the transaction.
Salt Lake City-based SPS has been servicing residential mortgages since 1989 and residential mortgage-backed securities (RMBS) transactions since 2000, according to Fitch Ratings.
The credit rating agency noted in a November 2023 report that SPS had approximately 806,000 non-agency RMBS loans (total value of $150 billion), 82,250 third-party serviced loans ($21.4 billion), and 26,500 agency and owned loans ($4.4 billion) at the end of second-quarter 2023.
According to Fitch, the servicer integrated “several digital technologies into its servicing platform to enhance the customer experience and adjust to the shifting technology landscape.” For example, SPS added new features to its call center, implemented a chatbot feature on its corporate website, and expanded the use of email and SMS text messaging.
SPS, bought by Credit Suisse in 2005, announced a deal in September 2022 to acquire some of the assets of Texas-based Rushmore Loan Management Services. With Rushmore as a subsidiary, SPS was set to employ more than 1,600 workers to service roughly 1.4 million loans, the companies said in an announcement of the deal.
In June 2023, UBS acquired Credit Suisse Group, becoming the ultimate parent company of SPS. The previous month, Bloomberg reported that UBS had plans to wind down a business in its U.S. mortgage unit that focused on “to-be-announced” (TBA) trading.
