Citigroup CEO Vikram Pandit plans to announce in the coming days a major shift away from the "financial supermarket" model that has guided the bank for the last decade.
The development comes as Citigroup and Morgan Stanley work toward an agreement creating a joint venture of Citi's Smith Barney brokerage unit, which sources say could be announced after today's closing bell.
The deal would provide a capital boost for Citigroup. But it will also be the first step toward the breakup of the massive investment bank, which is under pressure to raise capital to stem losses.
The eventual breakup of the supermarket model—in which a bank handled a client's every financial need, from investing to insurance—would mean that Citigroup would become more of a traditional bank like JP Morgan Chase.