2 billion of turnover at the end of September with a profit of 1

It would be a large gash in its universal Bank model, but vigorously defended a year by Vikram Pandit, CEO of the group. According to the American press, Citi plans to sell 51 of its shares in the broker Smith Barney to Morgan Stanley, which redeem the remaining 49 percent within three to five years. Smith Barney is integrated with the Citi wealth management branch, which has generated $ 13.2 billion of turnover at the end of September, with a profit of 1.59 billion. According to the Bloomberg Agency, the transaction could reach $ 3 billion. But the recovery of this entity, which employs just under 15,000 brokers, divergent, some the Encrypting to 8 or even $ 12 billion.

If this operation is embodied, it would make a point of organ to the redistribution of the cards were attended in the brokerage world last year. The first global broker Merrill Lynch was indeed adopted in extremis by Bank of America while Lehman Brothers collapsed. Wells Fargo acquired, to the nose and beard of Citi, Wachovia, which had important teams in this area. A new set of Smith Barney - Morgan Stanley, fort of approximately 23,000 employees (before any restructuring), would be clearly dominant in terms of personnel.

Recovery strategy

According to some observers, Citi, which has lost and fallen more than $ 50 billion since the beginning of the "subprime" crisis and rescued with money public (45 billion), try with this operation to a more offensive strategy. It could mark the beginning of a break-up of the supermarket to finance, as it had designed its founder, Sandy Weil, just ten years ago, at the time of the marriage of Citicorp and Traveler's Group. This sale may therefore sound the death knell of the Universal Bank model, leaving presage other sales by apartments (talking about the Mexican retail bank Banamex).

What is the share of influence of public authorities in this operation According to the financial channel CNBC, she would be encouraged by the US Federal Reserve. Indeed, the sale of the majority of the capital of this brokerage activity would bring fresh capital to Citi while now an interesting revenue streams. For Morgan Stanley, which pay cash (he received the Government $ 10 billion), it should considerably strengthen its asset management business. An activity which, if the merger succeeds, could be entrusted to Jim Gorman, recruited in 2006 by Merrill Lynch to give boost to the activities of the Group brokerage. His name is more regularly referred to succeed John Mack, the current boss of Morgan Stanley, in 2010.

It therefore appears that Citi, which continues to implement a plan of assignment of over $ 400 billion of assets, seeks to demonstrate more in addition to flexibility in its strategic options. Last week, for example, the Bank indicated that it would accept legislation allowing judges to restructure real credits. Similarly, it would seem that there are more cows sacred within the group. Robert Rubin announced that it was abandoning its role of Advisor special (see below) and the fate of sir Winfried Bischoff, the Chairman of the Board of Directors, would be in balance. If so, it could be replaced by Richard Parsons, former Chairman of the Board of Time Warner and a Director of the Bank.