Citigroup Inc and Morgan Stanley may announce a deal this week that could combine their brokerages to create a new company, the latest move in a financial services industry which has begun consolidating businesses wracked by heavy losses tied to mortgages, according to media reports.

Talks about the joint ventured moved forward over the weekend, a person briefed with the talks told Bloomberg.

Citigroup has suffered through four consecutive quarters of losses totaling $19.9 billion. Morgan Stanley's net income in its four latest quarters was $6.57 billion.

Morgan Stanley would between $2 billion and $3 billion to Citigroup to acquire a 51 percent ownership stake in the venture, people familiar with the plan told Bloomberg.

The deal would pay Citigroup between $2.5 billion and $3 billion cash, according to Reuters.

Citigroup would gain between $5 billion to $6 billion after taxes from writing up the value of Citigroup's Smith Barney brokerage, Bloomberg reported, citing an anonymous person familiar with the talks.

The new company is tentatively titled Morgan Stanley Smith Barney, Bloomberg reported. The combined business would have an estimated value of $16 billion to $20 billion, Reuters reports.