Credit Suisse : Sells Credit Derivatives Portfolio to Citigroup

Citigroup Inc. bought a multibillion-dollar book of credit derivatives from Credit Suisse Group AG during the second quarter of this year, in another sign of European banks unloading risk.

Switzerland’s Credit Suisse disclosed the sale of a portfolio comprising around 54,000 credit derivative trades in its second quarter results on July 28. The book was sold to Citigroup, according to a person familiar with the matter. Bloomberg reported Citigroup’s purchase earlier on Friday.

A spokesperson for Citigroup Inc. declined to comment.

The move comes amid a broad shift in investment banking, with many European banks scaling back capital-intensive trading businesses and better capitalized U.S. lenders often stepping in to buy them.

J.P. Morgan Chase & Co. also showed interest in buying the Credit Suisse book, according to two people familiar with the matter.

For Credit Suisse, the sale was part of a broader reshaping of its business as the bank looks to dial back on volatile investment banking and boost wealth management.

Read on.

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