Under Citigroup's reorganization of 2009, one business - Citicorp - would focus on traditional banking around the world, while the other, Citi Holdings, would hold the company's riskier assets. CEO Vikram Pandit's move would allow Citigroup to sell or spin off the Citi Holdings assets to raise cash. The reorganization also revealed the company's growing focus on back-to-basics lending and deposit-gathering, and dismantled the "financial supermarket" created by the company a decade earlier.
Citigroup suffered more than $65 billion in losses in late 2008 alone, more than half stemming from mortgage-related securities. The U.S. government stepped in twice to rescue the company with bailouts totaling $45 billion. Since then, the company had been divesting itself of many of its assets. On Jan. 13, 2009, Citigroup announced a deal to spin out Smith Barney, its broking arm, into a joint venture with Morgan Stanley’s broker.
With the reorganization of 2009, the new Citicorp would include the retail bank; the corporate and investment bank; the private bank, which serves wealthy individuals; and global transaction services.
Citi Holdings — which would account for $850 billion of Citigroup's $1.95 trillion in assets — would include Citi's asset management and consumer finance segments, including CitiMortgage and CitiFinancial. It would also be in charge of Citi's 49 percent stake in the joint brokerage with Morgan Stanley, and the pool of about $300 billion in mortgages and other risky assets that the U.S. government agreed to backstop in late 2008.