Citigroup’s market value last June, just before the credit crunch bit, was $261 billion (£133 billion); today it is $141 billion. That’s value destruction on an epic scale, equivalent to the GDP of Nigeria, or the Philippines.

Shareholders, staff and clients urgently want reassurance that the ship is being stabilised. Last month’s $7.5 billion capital injection from Abu Dhabi evidently has not been enough.

Today’s fourth-quarter results are the first big opportunity for the new team of Sir Win Bischoff and Vikram Pandit, chairman and chief executive, to stamp their authority on the business and show that they can see a credible way out of its difficulties.

The No 1 priority is to come clean about the size and toxicity of the asset-backed securities and leveraged loans on its books and to beef up its inevitably weakened balance sheet with new equity investors.

That means dollar writedowns in 11 digits. Trying to value these opaque and complex assets is difficult, but until the market is convinced that Citi is being realistic about the fair value of its impaired assets, the healing process cannot begin and the prospective investors of Asia and the Gulf will be reluctant to sign up for rescue capital.

Unconfirmed reports yesterday that the Chinese were having second thoughts about a capital injection are a blow, but perhaps not that surprising. China will not like the idea of being seen as an easy touch for any institution in need of emergency funding. Nor will it have taken any comfort from its investments in Barclays and Blackstone, both of which are showing a sharp capital loss thus far. Even without China, though, Citigroup looks on course to raise $10 billion in fresh capital.

Priority No 2 for Citi is to cut its cloth according to its newly straitened circumstances. That almost certainly means a reduced dividend and the axe being taken to some jobs. The dividend alone costs it $11 billion in cash a year. Citi plainly needs to adjust to a smaller starting base, even if it succeeds in selling assets to ease the cash-flow pressures.

Priority No 3 is to start thinking about what kind of creature Citi wants to be in future. The old days of buying up assets in any country and any area of banking, retail or wholesale, are over. Citigroup looks too big, too sprawling and too ill-disciplined to be managed properly. Now, with a new team on the bridge, radical ideas, including demerger or break-up, can and should be considered.

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