The pieces are going to the highest bidder, whether the buyer can afford it or not. The mega bank announced yesterday that it has jettisoned Smith Barney into the arthritic hands of Morgan Stanley.
Citi will still hold a 49% stake in the brokerage service. And the Citi/Smith Barney/Morgan Stanley venture will create the world’s biggest brokerage firm -- comprised of 20,000 brokers and have over $1.7 trillion under management -- but for their sake, we hope they conjure up a catchier brand name.
Still, today, Citi is planning further bust-a-moves. A New York Times article claims the company will soon attempt to split itself in two, separating “core” and “noncore” (aka profitable and notprofitable) segments of the business. Robert Rubin, who among other things helped create this “supermarket” model for Citi, resigned last week. CEO Vikram Pandit will likely follow soon.
Why the mess? Despite selling off its assets and getting over $45 billion from the government’s handout program, Citi is still expected to post a $10 billion loss for the fourth quarter… possibly more.