The unraveling of Sandy Weill’s financial supermarket picked up speed last week. Citigroup took Smith Barney off its shelves and moved it to a newly created store, Morgan Stanley Smith Barney. Morgan Stanley will hold 51 percent of the joint venture; Citi will retain 49 percent for three years at least, and will keep at least 20 percent of MSSB after five years. Citi’s pretax gain on the sale will amount to some $9.5 billion.
On January 14, Citi CEO Vikram Pandit told his employees that the “economic model of our business is sound and positions the company for success in the long term.” Not only that—“our core mission is unchanged.” But wait, there was more: “We are and will remain a bank. We will continue to help clients save, borrow, invest, transact, and we will provide them advice.”