Bank of America Corporation

Following, are some facts about the brokerage businesses of Citigroup and Morgan Stanley:

* Smith Barney's roots go back to Philadelphia, where broker Charles Barney founded his firm in 1873 and investment banker Edward Smith started his in 1892. In 1938, the firms merged, forming Smith Barney.

* In 1987, Smith Barney was acquired by financial services corporation Primerica, and six years later it became a subsidiary of Travelers Group, formed after the acquisition of The Travelers by Primerica.

* In 1998, Sanford "Sandy" Weill's Travelers Group bought U.S. bank Citicorp to create Citigroup, the world's largest financial services conglomerate. Smith Barney became a division of Citigroup Global Markets Inc. The deal would be the latest step in dismantling Weill's original conception for Citigroup.

* Morgan Stanley was created in 1935, when Henry Morgan and Harold Stanley left J.P.Morgan & Co to form the investment bank Morgan Stanley. Forty-two years later, the company entered the retail stock brokerage business as it merged with Shuman, Agnew & Co, a West Coast brokerage.

* Smith Barney ended September with 14,735 brokers. It has 7.5 million client accounts, and $900 billion in client assets. Morgan Stanley ended November with 8,426 brokers, and $546 billion in client assets.

* The combined entity would become the U.S. largest brokerage by number of financial advisers, prior to any attrition, surpassing Bank of America Corp and Wells Fargo & Co.

(Reporting by Juan Lagorio and Jonathan Stempel, editing by Bernard Orr) Keywords: CITI/MORGANSTANLEY (Reuters Messaging: juan.lagorio.reuters.com@reuters.net; +1 646 223 6124)

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The shares of Bank of America, now the top U.S. bank by assets, fell 1.2 percent, underperforming the sectoral KBW Banks index, which was down 0.4 percent.

On Thursday a senior executive in London, Brent Clapacs, said he was leaving and earlier in the week Merrill's brokerage head, Bob McCann, announced his departure, sparking concern among investors that Merrill's lucrative financial advisory business might be crumbling as a result of the acquisition.

"If there has to be change, I would much rather that people from the investment bank leave than people from the brokerage," said Ken Crawford, portfolio manager at Argent Capital Management in St Louis, Missouri, who owns Bank of America shares. "I think people will be watching more closely what happens with the brokerage force because I think that is the franchise value of Merrill."

Many other Merrill executives have kept their jobs at the bank, including former Chief Executive John Thain, who is now president of global banking, securities and wealth management.

Fleming joined Merrill Lynch in 1992 and from 2003 to 2007 co-headed Merrill Lynch's markets and banking group with Dow Kim, who left the bank in mid-2007. Fleming, a noted rainmaker who focused on financial companies, oversaw investment banking.

Among the deals he worked on was Merrill Lynch's 2006 sale of its investment management unit to BlackRock Inc a deal that freed up capital for Merrill Lynch and left it with a valuable asset: a nearly 50 percent stake in BlackRock.

Kim was in charge of sales and trading, the area that generated more than $50 billion of writedowns for Merrill Lynch and started the downward spiral that ultimately forced the investment bank and brokerage to sell itself.

In mid-September, when Lehman Brothers Holdings Inc was clearly in trouble, Fleming identified Bank of America as a potential merger partner for Merrill Lynch and approached a lawyer for the bank, according to a report last month in the Wall Street Journal.

The deal made sense, because Bank of America's balance sheet and retail banks could complement Merrill's securities franchise and retail brokerage business, the newspaper said.

Fleming pushed Thain to call Bank of America Chief Executive Ken Lewis on Saturday, Sept. 13, to talk about a potential deal, the report said.

Fleming was awarded $19 million of compensation in 2007, making him one of the top earners at Merrill Lynch. His going to Yale would be a return of sorts -- he is a graduate of Yale Law School.

"To some degree, it's inevitable," said Michael Nix, portfolio manager at Greenwood Capital Associates, noting there is always staff turnover following an acquisition. "But at least he's not going over to a competitor," he added.

(Reporting by Elinor Comlay; Additional reporting by Jonathan Stempel and Dan Wilchins; editing by Richard Chang and Andre Grenon) Keywords: MERRILL/FLEMING (elinor.comlay@thomsonreuters.com +1 646 223 6116)

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"Under the current turmoil of the global financial environment, B of A wanted to reduce part of its CCB holdings in light of its own financial conditions and other factors," the bank said in a statement. "CCB can understand."

The bank added: "We believe this will not affect Bank of America's position as the number two stakeholder, let alone affect the two sides' strategic cooperation."

Bank of America, needing cash to cope with tough economic conditions, raised $2.83 billion by selling 5.62 billion shares, or more than 2.4 percent, of Construction Bank on Wednesday, sending the Beijing-controlled bank's Hong Kong-listed shares tumbling 8.8 percent.

The sale, largely expected by investors, left Bank of America with a 16.6 percent holding, but some analysts believe the U.S. bank may sell more shares to raise further cash to cope with strains in the financial system.

Construction Bank's shares fell another 4.4 percent on Thursday.

Construction Bank's Thursday statement did not mention any possibility of future sales of Bank of America's stake, but said the U.S. lender had repeatedly pledged to maintain and develop the partnership.

"They will not give up the world's most promising market, or give up the win-win opportunity with Construction Bank," it said.

"We ... are fully confident that our future strategic cooperation with Bank of America will hold more success."

Chinese bank shares dropped steeply this week after the Bank of America sale, which fanned investor fears that other foreign institutions would sell off their stakes to raise cash amid torrid financial markets, and as the Chinese economy slows.

Hong Kong-listed shares of Industrial and Commercial Bank of China, the country's biggest bank, fell 6.8 percent amid worries investors Goldman Sachs, Allianz and American Express would trim their holdings when lock-up agreements lapse this year.

Chinese regulations limit a single foreign investor to owning 20 percent of a Chinese bank.

(Reporting by Ian Ransom; Editing by David Cowell) Keywords: CCB BANKOFAMERICA/ (ian.ransom@reuters.com; Reuters messaging: ian.ransom.reuters.com@reuters.net; +8610 6627 1027)

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Lenovo, China's top personal-computer maker, plunged 26 pct after it said it expects to post a loss for its fiscal third-quarter ended December and that it plans to shed 11 pct of its global workforce.

Cathay Pacific slumped over 7.6 pct after the Hong Kong flag-carrier warned of "disappointing" 2008 results due to lower revenue and fuel hedging losses.

Bank of China (BOC) lost over 8 pct after news that an entity controlled by tycoon Li Ka-shing sold 2 bln shares of the Chinese lender. A media report said Royal Bank of Scotland is also considering selling its holdings in BOC.

China Construction Bank (CCB) slipped more than 4.4 pct, extending its 8.7 pct fall yesterday, after Bank of America cut its stake earlier in the week.

China telecom firms saw continued profit-taking after Beijing issued long-awaited 3G licenses yesterday.

The Hang Seng index closed down 571.55 points or 3.81 pct at 14,415.91, off a low of 14,334.15 and high of 14,755.81. The index has shed 7 pct since yesterday.

Turnover was 55.52 bln hkd.

"Our market has been overbought of late, driven mainly by unsubstantiated hopes that the global economy will recover faster than what many analysts had expected," said Ben Kwong, chief operating officer at KGI Securities.

"It appears that scores of big players have misled many retail investors into believing this 'faster-recovery' story and they have now sold stocks in a big way for quick profit at the expense of small players," he said.

Kwong said there is no evidence yet that the global economy will recover anytime soon.

On the contrary, there has been more negative economic data and poor corporate earnings news around the world, pointing to extended weakness in major economies, he said.

US corporates laid off 693,000 jobs in December, up sharply from a revised 476,000 job losses in November and far more than what economists had estimated, a private-sector jobs report released overnight showed.

The report raised fears that non-farm payrolls data, due on Friday, will also be grim.

"It may be fair to say that there's a bubble in the rally that we've seen since the start of the year," Kwong said, referring to the market's strong gains in the first two sessions of 2009.

Dealers said profit-warnings by Intel in the US and Cathay Pacific and Lenovo here have heightened worries about corporate earnings.

Microchip maker Intel issued on Wednesday its second revenue warning on the fourth quarter, saying demand for personal computers was worse than anticipated previously. The US firm said it will not be able to meet even its previously lowered fourth-quarter revenue forecast, made in November.

Cathay Pacific fell 0.74 hkd or 7.62 pct at 8.97 after it warned that its 2008 earnings will be disappointing due to weak revenues and hedging losses.

Lenovo plunged 0.67 hkd or 25.97 pct to 1.91 after announcing that it is likely to post a loss for the December quarter and that it will lay off 2,500 employees to cut costs.

It said unprecedented global economic challenges have reduced demand for personal computers.

The company said it will take a pre-tax restructuring charge of about 150 mln usd for the financial year ending March 2009, which would be largely reflected in fiscal fourth-quarter results.

Matthew Kwok, research head at Tanrich Securities, said he is bearish on the near-term prospects for the local bourse, expecting more profit warnings as the reporting season draws near.

China banks were hit by fears of more share sales by key investors following Li Ka-shing's sale of BOC shares and Bank of America's sale of some stake in CCB.

BOC lost 0.18 hkd or 8.41 pct at 1.96 after Li Ka-shing Foundation, the charity arm of the tycoon, sold 2 bln shares of the Chinese lender at 1.98-2.03 hkd each.

Meanwhile, the Financial Times reported that Royal Bank of Scotland -- another strategic shareholder in BOC -- is considering selling its 2 bln stg stake in the bank amid a scramble by foreign investors in mainland banks to cash in their holdings.

CCB shed 0.18 hkd or 4.43 pct at 3.88. Bank of America earlier this week sold 5.62 bln shares of CCB at 3.92 hkd each, a big discount to its closing price on Tuesday.

ICBC fell 0.27 hkd or 6.82 pct to 3.69 on worries of possible sale by strategic investors after a share lock-up period expires at end-April.

China Merchants Bank dropped 1.04 hkd or 7.06 pct to 13.70 and Bank of Communications lost 0.29 hkd or 4.9 pct at 5.63.

"The decision of several strategic investors to sell shares in some China banks... served as a convenient excuse for big institutions to sell down mainland lenders," Kwong of KGI Securities said.

Mainland insurers were also sharply lower on profit-taking after recent gains.

Ping An slumped 2.55 hkd or 6.02 pct to 39.80, PICC P&C fell 0.39 hkd or 8.97 pct to 3.96 and China Life lost 0.80 hkd or 3.27 pct at 23.65.

Among other blue chips, HSBC was down 1.0 hkd or 1.33 pct at 74, Hong Kong Exchanges & Clearing fell 5.35 hkd or 6.38 pct to 78.50 and Hutchison Whampoa was down 1.50 hkd or 3.51 pct at 42.55.

China telecom operators saw continued profit-taking after Beijing issued 3G licenses yesterday to China Mobile, China Unicom and China Telecom.

China Mobile fell 2.45 hkd or 3.12 pct at 76, China Unicom tumbled 0.68 hkd or 7.4 pct to 8.51, and China Telecom lost 0.17 hkd or 5.61 pct at 2.86.

Oil producers fell sharply as crude oil prices tumbled more than 12 pct overnight following news of larger-than-expected energy stockpile buildup in the US.

The benchmark contract, light sweet crude for delivery in February, dropped 5.95 usd to settle at 42.63 usd a barrel on the New York Mercantile Exchange.

CNOOC dropped 0.53 hkd or 6.71 pct to 7.37 and PetroChina slumped 0.39 hkd or 5.23 pct to 7.06 while refiner China Petroleum & Chemical Corp (Sinopec) also lost 0.30 hkd or 5.98 pct to 4.72.

Among metals and mining firms, Aluminum Corp of China (Chalco) slumped 0.47 hkd or 9.31 pct to 4.58, Jiangxi Copper fell 0.91 hkd or 12.43 pct to 6.41, Zijin MIning slipped 0.39 hkd or 8.19 pct to 4.37 and Angang Steel lost 1.18 hkd or 12.22 pct at 8.48.

Coal firm China Shenhua fell 0.62 hkd or 3.38 pct to 17.70.

The Hang Seng China Enterprises index ended down 484.66 points or 5.88 pct at 7,760.02.

(1 usd = 7.8 hkd)

jun.concepcion@xfn.com

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