Citi sells Smith Barney, old Philly name; seeks subprime exit: UPDATE

It's official: Citigroup is turning control and majority ownership of its Smith Barney brokerage over to rival Morgan Stanley for $2.7 billion. Statement here.

Citi's also looking to unload founder Sandy Weill's old Citifinancial stores, which lend money to poor people at high rates of interest (the one in PhillyDeals' neighborhood recently closed, which may be a good sign, or a very alarming one.) CEO Vikram Pandit "is unraveling his empire to save his bank" says Bloomberg News here. (Link updated)

Smith Barney is an old Philadelphia name. How do we figure? Writes Charlie Godwin, svp at Farr Miller & Washington's Wayne office, who ran Smith Barney's Washington DC branch in the 1980s:

"Smith Barney traces its origins back to Philadelphia where Jay Cooke (created the bond sales force)  to help finance the Union cause in the Civil War.  They were primarily an institutional firm unitl the 1976 merger with Harris Upham.  It was a fine, high quality firm with wonderful roots right here.

" In the early '80s they made a brilliant move and had John Houseman do their TV ads.  Jerry Tsai bought the firm in the late '80s and ultimately sold to Weill, who kept the name as he made
multiple acquisitions.

"It had a great name and history until they put it on steriods."