Citi Can’t Sneak Its Derivatives Binge Past Mike Mayo

He's onto you, Corbat.

So Citigroup has become the little investment bank that could, when everyone else on Wall Street cannot. And it’s made this remarkable turnaround by doubling down on, of all things, its derivatives holdings. Which happily accords with Mike Mayo’s suspicions that there’s something fishy about the whole thing.

In 2009, Citibank, Citigroup’s main banking subsidiary, had $32 trillion in derivatives, according to regulatory filings. That figure more than doubled, to $70 trillion, in the third quarter of 2014.

“It’s a little bit of a head scratcher,” Mike Mayo, a bank analyst at the brokerage and investment group CLSA, said. “Why is this the best use of Citi’s capital?”

Citigroup’s Roaring Revival on Wall Street [DealBook]