Citicorp's Citibank unit has announced its purchase of a supercomputer from Cray Research Inc., for its global derivatives business.
The Beaverton, Ore.-based computer maker's Superserver 6400 will be used for high-speed processing of the complex numbers and equations in the bank's derivatives trading operation.
Gordon Clancy, head of research and technology at Citibank's Global Derivatives business, said the banking company plans to integrate the system with its existing network of more that 1,000 Sun Microsystems workstations worldwide.
"The compatibility between the CS6400 with the applications we are already running on our network workstations will allow us to realize benefits from the system quickly without a major software conversion effort," he said.
Mr. Clancy said the system will offer the bank greater speed in processing transactions and analyzing risk and structuring deals while allowing Citi to hold a competitive advantage over the industry.
"With the boost in speed we expect from the CS6400, we are targeting substantial reductions in key processing areas," he said.
Norman Jaffe, president of research at Fox-Pitt, Kelton Inc. in New York said Citibank is "a major" player in the global derivatives industry. And has been able expand its operation as its profitability and debt ratios have improved.
Broad Range Cited
"Citibank ranks among the top three banks for handling derivatives worldwide," he said. "They are involved in all derivatives from swaps to plain-vanilla options."
Mr. Jaffe credited Citibank's success in derivatives to its extensive international network, which allows it to serve many markets better than its competitors.
Neither party would comment on the cost of the system, but industry sources estimate it at over $1.5 million.
The system is scheduled to be installed at Citibank's data center in New York later this summer.