Citigroup on Monday bought the banking operations of Wachovia, the sixth-largest lender in the US, in a government-aided, cut-price deal that reshapes the country’s banking landscape and prevents the failure of yet another financial institution.

The $2.2bn takeover of Wachovia, which was clinched when Wells Fargo, the other bidder, pulled out of the race, will turn Citi into the largest retail bank in the US with more than $600bn in deposits and more than 4,300 branches.