Citi-Morgan Stanley joint venture profit jumps

* Citigroup Q1 asset and wealth management profit $86 mln

* Revenue rises from Q4, but credit costs also higher

NEW YORK, April 19 (BestGrowthStock) – Citigroup Inc (C.N: ), which
owns 49 percent of brokerage Morgan Stanley Smith Barney, said
its brokerage and asset management profit surged in the first
quarter, reflecting lower merger-integration expenses and a
one-time gain.

Citigroup said net revenue from these businesses rose 25
percent from the fourth quarter — boosted by its sale of a
Chilean pension unit — while expenses fell 9 percent.

As a result, net income more than doubled, to $86 million
from $31 million in the fourth quarter.

Citigroup did not disclose detailed results for Smith
Barney, which was sold to Morgan Stanley last June in exchange
for a 49 percent stake. The venture comprises 87 percent of
Citigroup’s asset and wealth management assets.

First-quarter profit (Read more your timing to make a profit.) in these businesses was weighed down
by a 44 percent spike in credit costs, reflecting soured loans,
the bank said.

Citigroup did not disclose other details about the joint
venture, but the glimpse it provided portends good news for
Morgan Stanley (MS.N: ) (Read more about the money market today. ), due to report first-quarter results on
Wednesday.

So far, Morgan Stanley Smith Barney results have been hurt
by merger costs and the impact of fleeing brokers.

Compared with the year-earlier first quarter, before the
Smith Barney sale, Citigroup’s asset and wealth management net
revenue fell 79 percent to $340 million, credit costs fell 76
percent, and net income rose 69 percent.

Citigroup has announced plans to divest several money
management businesses over time, to raise cash and help repay
its 2008 government bailout.

The bank said its first-quarter net loss attributable to
minority interests, in the wealth management arena, narrowed 71
percent from a year earlier to $5 million.

Stock Market Today

(Reporting by Joseph A. Giannone; editing by John Wallace)

Citi-Morgan Stanley joint venture profit jumps