Citigroup is planning thousands more job cuts in what would be its second round of large-scale layoffs this year, as the ailing bank seeks to boost profitability in the wake of billions of dollars of investment losses.

The world’s largest bank yesterday conceded that it would make further job cuts, although it would not give a figure ahead of the appointment of a new chief executive.

Citigroup is seeking a replacement for Charles Prince, who resigned as chairman and chief executive this month after massive declines in the value of sub-prime mortage-related investments contributed to a $6.4 billion (£3.1 billion) third-quarter write-down and the prospect of $11 billion more this quarter. The bank is expected to record a further $4 billion of sub-prime-related losses in the first quarter of next year.

Although any new redundancy plan would need to be signed off by Mr Prince’s replacement, the bank is so certain of the need to make widespread job cuts that it is preparing a rough plan that would involve thousands of redundancies.

CNBC reported yesterday that Citigroup was considering cutting up to 45,000 positions in the second round of job cuts, in addition to the 17,000 positions eliminated in April, which represented about 5 per cent of the group’s workforce. After the first job losses that figure would be a cut of nearly 14 per cent of the workforce.

In a short statement, Citigroup said: “We are engaged in a planning process in anticipation of our new chief executive and our business heads in which we can be more efficient and cost-effective to position our business in line with economic realities. Any reports on specific numbers are not factual.”

The redundancies would follow an overhaul earlier this month in Citigroup’s investment banking business, in a move that gave London greater prominence in its global operation. They could also be a precursor to the eventual break-up of Citigroup, a financial supermarket offering a full range of retail and investment banking services that many investors believe has become unfocused.

Citigroup’s search for a new chief executive to finalise the redundancy plan and decide on the future shape of the banking giant was dealt a blow when John Thain, the chief executive of NYSE Euronext and the favourite for the job, recently took the top position at Merrill Lynch instead.

Merrill Lynch had run into similar sub-prime-related difficulties as Citigroup, prompting the departure of Stan O’Neal, its chief executive, a few days before Mr Prince’s resignation.

Sir Win Bischoff, formerly Citigroup’s European head, is acting as chief executive until a replacement is found for Mr Prince.

Separately, it emerged that JPMorgan plans to cut about 100 positions in its sub-prime lending unit in California. The bank has tightened its sub-prime mortgage lending criteria to such an extent that about 40 per cent of the home loans it made in 2006 would no longer be approved.

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