Citigroup plans to break itself up by separating higher risk US consumer finance and securities businesses from its global commercial banking operations in an attempt to ensure its survival, the FT reported, citing people close to the situation. Citi will place unwanted assets and businesses worth more than $600bn – a third of its balance sheet – into a “non-core” unit to isolate them from healthier parts of the company. The move to split the company would go a long way towards dismantling the 1998 merger between Citicorp and Travelers that created Citigroup and could be a template for other troubled banks.  The bank also confirmed it woulds spin off  Smith Barney, its US brokerage business, into a joint venture controlled by Morgan Stanley. The WSJ’s Deal Journal live-blogged the conference call.

This entry was posted by Stacy-Marie Ishmael on Wednesday, January 14th, 2009 at 5:38 and is filed under Capital markets, M&A. Tagged with citi, morgan stanley. Edit this entry.