Brokerage giant Credit Suisse First Boston said Wednesday it will sell its online trading arm to Bank of Montreal, rather than try to make a go of it in the increasingly competitive business.
The Canadian bank will pay $520 million for the online unit, CSFBdirect. The business will be merged into Bank of Montreal's online investing arm, Harris InvestorLine.
For Credit Suisse First Boston, the sale is the latest effort by Chief Executive John Mack to cut expenses by $1 billion as the brokerage reels from reduced stock market trading and lower fee income because of fewer new share offerings and a plunge in merger deals.
The brokerage had acquired the online unit as part of its $13-billion purchase of Donaldson, Lufkin & Jenrette Securities last year. Credit Suisse First Boston changed the name of DLJ's online brokerage from DLJdirect to CSFBdirect and has spent millions advertising it.