Citigroup is on the surgeon’s table – and Vikram Pandit, the chief executive, is, after a year spent defending the bank’s sprawling business model, reaching for his scrubs and scalpel. Citi is reportedly negotiating to sell a majority stake in the Smith Barney brokerage to Morgan Stanley, with the prospect of relinquishing the entire business.

Meanwhile, the departure of Robert Rubin, the director and former Treasury secretary criticised for his role in Citi’s disastrous expansion in risk-taking, reinforces the notion that Citi wants to put the bad old days behind it. This, though, is no minor procedure. Smith Barney, with its 14,000 financial advisers, is forecast by Barclays Capital to make $1bn next year, suggesting a valuation of up to $10bn. Morgan Stanley, though, would only pay a portion of that – perhaps $2.5bn – to reflect the contribution of its smaller operation. But Citi’s North American global wealth management division, which houses the brokerage, contributed two fifths of Citi’s net profit in 2007, up from just 6 per cent the previous year, demonstrating its relative stability in tough times.