Citigroup, till recently the nation's third largest US bank by market capitalisation and the only one with a truly global presence, is considering sale of parts of the company in the face of declining share prices.

Citigroup now finds itself in the centre of the vortex as America's banks continue to face a major crisis of confidence. While some are struggling to maintain their existence in the face of declining share prices, others have already capitulated and declared bankruptcy. 

The century-old Citigroup's precipitous stock-market plunge accelerated on yesterday, sending shock waves through the financial world. The shares slumped 26 per cent yesterday, halving the company's value in just four days. So far this year, the Citigroup stock is down 83 per cent. Currently, they are trading at their lowest in a decade and a half.

Citigroup, once the biggest US banks, with a stock market value of $274 billion at the end of 2006, dropped yesterday to about $26 billion, slipping to No 5, after Minneapolis-based US Bancorp.

A plan CEO Vikram Pandit announced this week to cut costs by shedding 52,000 jobs and an endorsement by billionaire Saudi investor Prince Alwaleed bin Talal didn't assuage shareholder concerns that bad loans and securities write-downs may extend a yearlong run of net losses totaling $20 billion. (See: Citigroup to slash 50,000 jobs worldwide)

The company's shares fell 26 per cent in New York yesterday, closing below $5 for the first time since 1994, as stocks worldwide sank on concerns a global recession may deepen. JPMorgan Chase & Co, the biggest US bank, fell 18 per cent to $23.38, while No 2 Bank of America Corp declined 14 per cent to $11.25 and Wells Fargo & Co fell 7.7 per cent to $22.53. US Bancorp fell 6.4 per cent to $22.12.

Desperate times call for desperate measures, and the management at Citigroup is thinking along those lines. In fact, the board, led by Chairman Win Bischoff, CEO Vikram Pandit and independent director Richard Parsons is meeting at the bank's headquarters in New York today to explore options for resuscitating the company, including exploring possibilities of asset sales and mergers. (See: IBM, Wipro eye a piece of Polaris: report)

Investors and analysts have long pressured the bank to consider ways to lift its stock price, including splitting the company or selling pieces. While a few also say the company should consider selling itself outright, there is no certainty that any change would happen soon. Senior executives say the company is financially strong and has ample financing options. Moreover, there are few buyers who would be willing to pay a price that Citigroup would want for its most valuable assets.

News that the giant bank's largest individual shareholder, Saudi Prince Alwaleed Bin Talal, planned to increase his stake to 5 per cent did little to resolve questions enveloping Citigroup in recent days. The move by Alwaleed, a long-time investor in the New York-based bank, follows the US government's decision to inject some $25 billion. That left Alwaleed with about a 4 per cent stake in Citigroup. (See: Citigroup stock hammered despite Alwaleed's support)

Alwaleed, in a press release from his holding company, expressed his faith in Citigroup management, including CEO Vikram Pandit. He added that he believed the company was doing what is necessary to weather the current economic crisis. Alwaleed's firm did not provide terms of the purchase including how many shares he would purchase or at what price.

Alwaleed is one of the world's richest people and worth about $21 billion, according to Forbes. The Saudi prince first acquired a stake in Citicorp, which later became Citigroup, in 1991. According to filings, Alwaleed also is a big investor in media company News Corp and online travel site Priceline.com. Earlier this year, he was among a group of investors who invested $12.5 billion in Citigroup, as part of an effort by the bank to raise capital.