Wachovia says is well capitalized to back business

NEW YORK (Reuters) - Wachovia Corp WB.N said on Tuesday it remained well capitalized to back its business, one day after the financial group sold its vast banking operations to Citigroup Inc (C.N).

As part of the deal, Wachovia -- formerly the sixth-largest U.S. bank by assets -- remains a public company and retains asset management unit Evergreen Investments, brokerage Wachovia Securities, and insurance brokerage Wachovia Insurance Services.

But some investors and analysts have expressed concerns about Wachovia's ability to keep doing business.

"Wachovia is in a strong position to provide credit support and overall capital backing to key businesses, including retail brokerage, asset management, retirement services and capital markets," the bank said in a statement.

Wachovia added the Federal Reserve Bank was ready to provide liquidity as needed.

The bank's shares fell 81.6 percent on Monday -- as stock markets suffered huge losses around the world -- after the fire sale of the banking operations following a global credit crisis that had forced it to post billions of dollars of losses.

But on Tuesday the stock was up $1.61, or 87.5 percent, to $3.45 in late afternoon trading on the New York Stock Exchange.

In addition, Wachovia and Citigroup said their deal went on despite the failure of a $700 bailout plan in the U.S. House of Representatives on Monday to allow the government to buy toxic assets from banks.

Citigroup could benefit from the bailout by selling to the U.S. government part of Wachovia's bad assets portfolio.

(Reporting by Juan Lagorio, editing by Gary Hill)