Financial Business Update: Morgan Stanley & Citi FIGHT Over JV, BofA Completes ZERO Modifications

Morgan Stanley (NYSE:MS) and Citigroup Inc. (NYSE:C) now say that they will not set the valuation of their Smith Barney brokerage joint venture until September 10th, as the banks continue to disagree about MS’s purchase of a 14 percent investment from Citigroup. The latter firm values its 49 percent holding in the venture at $11 billion, and MS’s offer represents 40 percent of that estimate. The firms have recruited Perella Weinberg to help resolve the dispute.

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Bank of America Corporation (NYSE:BAC) has failed so far to complete any first-mortgage modifications that reduce loan balances for borrowers under the $25 billion agreement reached earlier in 2012, according to Joseph Smith, the official monitoring the agreement. However, five financial institutions which are a part of the settlement have provided $10.6 billion in relief for consumers from March 1st to June 30th, with $8.7 billion in the form of short sales through which customers sell their homes that are ‘under water’ for less than the value of the mortgage. Bank of America did produce $4.8 billion in short sales, which was the most of the five banks, according to the first report by the settlement monitor.

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