Credit Suisse Cuts Rates Traders to Emphasize Electronic Trading

(Bloomberg) -- Credit Suisse Group AG is shrinking its rates business in New York and London to focus on electronic trading.

The group, which trades government debt and interest-rate derivatives, will cut sales and trading positions in the U.S. and the Europe, Middle East and Africa region, according to an internal memo from Yves-Alain Sommerhalder, one of the heads of the international trading-solutions group. The bank has about 60 people in that area and will cut about 15 percent as it shifts resources to its algorithmic-trading platform, according to a person familiar with the matter.

“This will allow us to re-invest into our electronic platform and lean into product areas that better align to market environment and client demand,” Nicole Sharp, a Credit Suisse spokeswoman, said in an interview.

The lender reshuffled its markets team leadership last year, and in a subsequent review decided to make a more aggressive push toward electronic offerings. More trading in the $14 trillion Treasury market is being executed electronically, with 69 percent of the roughly $487 billion in daily turnover handled that way, according to Greenwich Associates.

Even as the bank refocuses it efforts, it will continue to maintain its U.S. Treasury and Swiss primary dealerships, according to the memo.

Credit Suisse’s algorithmic-trading division, known as Advanced Execution Services, is a core focus and priority for the company, according to the memo. The bank named Anthony Abenante last year to oversee the global AES business.

The shift in the rates operation at Credit Suisse echoes decisions by other banks. JPMorgan Chase & Co. said in 2016 it would exit a large slice of the business of settling government securities, and Deutsche Bank AG announced a retreat from the U.S. rates business this year. As major banks pull back, non-dealer firms including Citadel Securities have been making inroads into rates trading.

--With assistance from Liz Capo McCormick.

To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Vincent Bielski

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