Citi, Morgan Stanley Merge Brokerages

Attempt to skirt new rules could anger shareholders

(NEWSER) - In a move to skirt government restrictions on executive pay for recipients of bailout cash, some Wall Street companies are discussing raising base salaries, the Journal reports. Citigroup and Morgan Stanley are considering the idea, which is gaining currency as regulators keep a watchful eye on bonuses, say industry insiders. Higher base salaries could actually help boost bonuses, typically a percentage of salary. More»

Still smarting from bad mortgage bets, the company will split to remain solvent

(NEWSER) - Citigroup lost $8.29 billion in the fourth quarter—twice as much as expected—as the credit crisis continues to batter big banks, Bloomberg reports. The bank suffered a net loss of $1.72 per share, falling far short of analysts’ estimates. Citigroup, which lost 77 percent of its trading value last year as it accepted $45 billion in bailout funds, now looks to split into two entities. More»

(NEWSER) - Say goodbye to the Citigroup empire. When the company releases its earnings next week, it'll also unveil a drastic plan to slice away businesses until it’s roughly two-thirds of its current size, the Wall Street Journal reports, and looks much like Citicorp did before the merger that created Citigroup. After ceding Smith Barney to Morgan Stanley and shedding or shrinking several other units, the new leaner Citi will cater to large corporations and rich people. More»

The joint venture would create the world's largest retail brokerage

(NEWSER) - Morgan Stanley is close to a deal giving it control of Citgroup’s Smith Barney business and creating the world’s largest retail brokerage, reports Reuters. The joint venture would give Morgan 51% of Smith Barney for up to $3 billion. In addition to the cash, Citi would benefit from the ability to write up the value of Smith Barney, netting the beleaguered bank another $6 billion in post-tax equity, reports Bloomberg. More»

Government strikes deal to sell remaining 2.4B shares

(NEWSER) - Taxpayers will wind up making out like bandits on their $45 billion bailout of Citigroup. The Treasury Department has struck a deal to sell its remaining 2.4 billion shares of Citigroup for $4.35 a share, it announced yesterday, bringing the total money made off such sales to $57 billion. Citigroup will pay the underwriting fees on the sale. More»