Citigroup reported net income for the third quarter 2012 of $468 million was down from $3.8 billion in the prior year period.

Citi said third quarter results included a pre-tax loss of $4.7 billion ($2.9 billion after-tax) from the previously announced sale of a 14% interest and other-than-temporary impairment of the carrying value of its remaining 35% interest in the Morgan Stanley Smith Barney (MSSB)joint venture.

Excluding the impact of CVA/DVA, the loss on MSSB and a $582 million third quarter tax benefit, Citi said its net income was $3.3 billion, 27% higher compared to the same quarter in 2011.

Vikram Pandit, Citi’s chief executive officer, said: “Last month’s price agreement on MSSB has given us more certainty on our exit from that business and added to the reduction of Citi Holdings, which is now only 9% of our balance sheet.”

Citigroup’s allowance for loan losses was $25.9 billion at quarter end, or 4.0% of total loans, compared to $32.1 billion, or 5.1%, in the prior year period. The $1.5 billion net release of loan loss reserves in the quarter increased 6% versus the prior year period.

To read the Citigroup news release click here.