Citigroup and Morgan Stanley far apart on joint-venture value

(Reuters) - Morgan Stanley has appraised Morgan Stanley Smith Barney, its joint venture with Citigroup Inc, at less than half of the value shown on Citigroup's balance sheet, Citigroup said in a filing on Thursday with the Securities and Exchange Commission.

Citigroup and Morgan Stanley exchanged appraisals of the joint venture as part of a process by which Morgan Stanley intends to purchase an additional 14 percent share of the brokerage. Morgan Stanley currently owns 51 percent.

Citigroup said its appraisal "slightly exceeded" its own carrying value of approximately $11 billion for its 49 percent stake.

To set a final price for the 14 percent stake, the two sides will use a third-party appraisal process that will be concluded at the end of August, Citigroup said.

The outcome could result in a "significant" non-cash charge to Citigroup net income in the third quarter, the filing said, adding that any impairment would not impact the bank's Basel 3 regulatory capital position. (Reporting by David Henry in New York; Editing by Gary Hill)