Morgan Stanley CEO says no Smith Barney deal delay

By Joseph A. Giannone

NEW YORK (BestGrowthStock) – Morgan Stanley (MS.N: ) (Read more about the money market today. ) Chief Executive James Gorman on Monday shot down recent reports that the investment bank wanted to put off purchasing a larger stake in brokerage Morgan Stanley Smith Barney from its joint venture partner, Citigroup Inc (C.N: ).

“It’s part of the rebalancing of this firm,” Gorman told hundreds of Wall Street executives gathered for the Securities Industry and Financial Markets Association’s annual meeting.

Merging Morgan Stanley’s wealth arm and Smith Barney in June 2009 was a key part of Morgan Stanley’s efforts to recover from the 2008 financial crisis that nearly knocked it out of business. The investment bank has a 51 percent stake in the brokerage venture and options to acquire additional shares from Citigroup starting in 2012.

Recent news reports said Gorman, eyeing heightened capital requirements, might postpone purchases to give Morgan Stanley “wiggle room.”

The report was “not accurate,” Gorman said. “We fully intend” to complete its purchases from Citigroup as was agreed in the January 2009 deal.

Thus far, Morgan Stanley Smith Barney has been distracted by merger integration issues and has struggled to expand its adviser force, attract assets and achieve its performance targets. Gorman said he remained “thrilled” with the brokerage and its potential.

“It was an extraordinary opportunity,” he said at the meeting. It was the phoenix that rose from the ashes” of the financial crisis.

(Reporting by Joseph A. Giannone, editing by Maureen Bavdek)

Morgan Stanley CEO says no Smith Barney deal delay