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“Global universal bank is the right model”, hollered one slide from the presentation to employees by Vikram Pandit, Citigroup’s chief executive, in November. Then, faith in the bank’s strategy was a shred of hope against thousands more job losses. But almost 11 years after the $70bn merger that formed Citi, Mr Pandit now stands ready to split the financial behemoth.

This, though, may not be a strategic change of heart concerning the merits of across-the-spectrum banking. The dismal state of banking balance sheets has undermined belief in the value of assets. Nothing less than a division of Citi’s business to create a separate “non-core” unit is now required to put its heap of noxious assets out of sceptical investors’ minds. There is, however, at least one risk. The required pricing of unwanted businesses and assets could produce a reassessment of valuations at peers.

What, then, will remain with Citi? After all, there are few high-margin investment banking products now in demand. Consumer and commercial banking face rising losses. But shorn of the burden of Citi’s problem assets – plus riskier consumer lending and investment banking businesses – many core businesses will eventually recover their earnings power come recovery. Citi seems likely to regroup round its retail banking, commercial operations and bog-standard services such as custody and clearing.

Critics who have (rightly) questioned the benefits of diversification within a banking “supermarket” should not trumpet victory too loudly. For example, profitable corporate banking relies on peddling ancillary investment banking services to customers. Many of those will remain. Citi’s break-up, too, is likely to remain superficial until improved confidence enables its nasties to be sold or spun off. But even if Citi moves from universal banking to a mere galaxy of financial services, consolidation as a tool to solve banking’s woes now has an upper bound. Banks really can be too big to succeed.

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