Citi may separate its global bank

A wider reorganisation of Citigroup's banking and investment banking businesses may be on the horizon. The Financial Times reported that Citigroup plans to, in effect, unravel most of the business acquired from the takeover of Travelers 10 years ago.

The FT reported Citi plans to separate large parts of its investment bank and US consumer finance businesses from its global commercial banking business  in a dramatic attempt to ensure its survival.

The FT provided few extra details of the plan but reported that Vikram Pandit, Citi's chief executive, decided to reverse his previous backing for Citi's "financial supermarket" structure and split the troubled group into a "bad bank" and "good bank".

The newspaper reported that a draft plan for tincluded placing Citi's troubled mortgage-related assets, its specialist US consumer finance businesses CitiFinancial and the insurance broker Primerica into the bad bank. Other parts of the investment bank, the former Salomon Brothers, could also be included in the non-core unit according to the FT.

Over the weekend, news emerged of Citi's plan to fold its Smith Barney brokerage business into a joint venture with Morgan Stanley that the latter would control.