Citigroup worries mount and shares tumble 23 percent

By Jonathan Stempel

NEW YORK (Reuters) - Citigroup (C.N) faced growing uncertainty on Wednesday about whether it will rebound from punishing losses, as investors drove the stock below $5, its lowest level since a government rescue in November.

More bad news is expected on Friday, when the bank plans to report quarterly results, six days ahead of schedule, and analysts are looking for a fifth straight multibillion-dollar loss. The bank is also widely expected Friday to provide details of a comprehensive downsizing designed to ensure its survival.

Rival JPMorgan Chase & Co (JPM.N) also moved up its earnings report by six days to Thursday.

Once the world's largest bank, but now No. 3 in just the United States, Citigroup is expected to shrink by about one-third as it focuses on corporate, investment and retail banking and trims trading operations, a person familiar with the plan said.

Citigroup will also put unwanted businesses and assets into a separate structure, with an eye towards their eventual sale, the source said.

The U.S. Treasury Department has pumped $45 billion (£30.7 billion) of taxpayer funds from the Troubled Asset Relief Program (TARP), including $20 billion on November 23, when the government agreed to a bailout, sharing in bank losses in exchange for preferred stock and warrants.

The bailout helped avoid a collapse on the heels of the Lehman Brothers Holdings Inc's (LEHMQ.PK) bankruptcy on September 15.

"I really don't know how the unravelling finishes," said Henry Asher, president of Northstar Group Inc in New York. "It looks like the government is forcing a controlled descent, without going the full monty as it did with Lehman."