Citi- Stanley Brokerage Deal on Cards

Citigroup Inc., one of the largest financial players in the US market, after incurring heavy losses in the last few months, is expected to gain on highly with its deal with Morgan Stanley.

Both the companies are close on the merger of Smith Barney business of Citi with that of Morgan Stanley brokerage. If the deal gets sealed, it will result in the largest retail brokerage of the world. The financial service provider will retain the 51% share of the new venture, paying $2.5- $3 bn to the Citigroup.

The merger is surely going to be a big boon for Citigroup Inc. as it will help inflate its balance sheet. The company is facing extreme pressure from the US government to shore the balance sheet since the sanction of $ 45 bn bailout from the government. The bailout did not improvised the position of the company much and it needs a great pullout like the deal to save itself from registering heavy losses again.

The heavy losses have compelled the Citigroup to keep its future at stake for securing its present. As according to an analyst in New York, they are selling off the future to get through the crisis of the present, and unfortunately they don't have a lot other choice. Smith Barney has been a center point of Bank's business for the last one decade.