• Bloomberg, Wednesday, January 14, 2009 11 AM

Citigroup CEO Vikram Pandit, who has spent 13 months trying to integrate the New York-based behemoth assembled by his predecessors, is unraveling the empire to save the bank, Bradley Keoun and Lisa Kassenaar report. He has already ceded control of Smith Barney to Morgan Stanley. He may also dump the CitiFinancial consumer-lending unit, sell Tokyo-based Nikko Asset Management and curtail trading with the bank's own capital, sources say.

The bank's remaining parts will include branch banking, advising on mergers, underwriting securities, processing payments, corporate lending and handling trades for clients, the sources say. It also will maintain the "globality" that Pandit said last year was the bank's defining strength.

The financial-supermarket model "was never going to work," says Bill Smith, founder of Citigroup shareholder Smith Asset Management. "You had three management teams that all failed to integrate this. You will not recognize this company within 12 months."

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