The move would essentially dismantle the 1998 merger between John Reed's Citicorp and Sandy Weill's Travelers that created Citigroup. The new-look Citi would be similar to the old-style Citicorp: a global commercial and retail bank. The new structure would no longer include some of the risky investment banking and consumer finance businesses, including subprime mortgages, that were part of the old Travelers.

People close to the situation said Vikram Pandit, the chief executive, had reversed his previous backing for Citi's financial supermarket structure. Bankers said that the unwanted parts could be eventually spun off into a wholly separate entity but, until then, it was likely to operate as an arms-length unit of Citi, in an attempt to isolate badly-performing businesses and assets.