January 18, 2011 / 4:07 PM / 8 years ago

Citi shows Morgan Stanley broker venture lost money

* Brokerage, asset management 4th-quarter net loss $52 mln

* Citi says net revenue fell 50 pct to $136 mln

* Results hint at what Morgan Stanley will report Thursday

NEW YORK, Jan 18 (Reuters) - Citigroup Inc (C.N), 49 percent owner of brokerage giant Morgan Stanley Smith Barney, on Tuesday revealed the joint venture likely suffered a fourth-quarter loss as revenue plunged from last year.

Citi said its brokerage and asset management holdings — virtually all of which is the Morgan Stanley venture — had a net loss of $52 million, compared with a profit of $31 million a year earlier.

Net revenue meanwhile plunged 50 percent to $136 million. Citi’s results also show the bank recorded a smaller income tax benefit in the fourth quarter than it did last year.

Morgan Stanley (MS.N) reports its results on Thursday.

In its presentation to analysts, Citi emphasized the unit’s improvements since the third quarter, when the business generated a net loss of $153 million and had negative revenue.

Citi revealed little more about its brokerage holdings, part of a vast portfolio of assets to be sold off. The bank has been working to slim down, raise capital and strengthen finances hammered by collapsing mortgage markets and the bank crisis.

The company also said its brokerage and asset management assets fell 10 percent to $27 billion from a year ago.

Citi transferred its Smith Barney business to the Morgan Stanley-run venture at the end of May 2009. (Reporting by Joseph A. Giannone, editing by Dave Zimmerman)

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