Citigroup struggling in spite of bailout

NEW YORK, Jan. 14 (UPI) -- Citigroup Inc. is taking direction from "a new CEO," namely the U.S. government, as it seeks to sell various non-core businesses, one investor said.

The financial giant, having accepted cash infusions from the government of $25 billion and $27 billion, has "a new CEO … his name is Uncle Sam. He is an activist and he wants the company monetized," investor William Smith told The New York Times.

Citigroup arranged to sell a portion of its prized brokerage firm Smith Barney to Morgan Stanley for $2.7 billion Tuesday.

The company will keep 49 percent of the joint venture.

Sources said Federal Deposit Insurance Corp. Chairwoman Shela Bair directed the company to begin shedding non-core businesses in November. A spokesman for the FDIC said the matter would be considered confidential.

In spite of the bailout funds, Citigroup is expected to announce operating losses of $10 billion in the fourth quarter, the Times said.

A few on Wall Street wonder if the sale of Smith Barney will go far enough to get Citigroup out of trouble.

"They have moved the chips around, but it's the same game," said Meredith Whitney, an Oppenheimer banking analyst.

"They still have the same capital needs," Whitney said.