Citigroup is expected as soon as today to appoint a new chief executive, with Vikram Pandit emerging as favourite to head the world’s biggest bank.

The board is scheduled to meet today and tomorrow to discuss whether to appoint Mr Pandit, the head of investment banking, or another candidate, such as Robert Willumstad, a former president of the bank.

The board has also to decide who will take over from Robert Rubin, the former US Treasury Secretary, who is the acting chairman and who is understood to have made clear that he sees his position as a temporary measure.

Both the chief executive and chairman roles became vacant after Charles Prince quit at the beginning of last month amid mounting losses arising from the bank’s poor investments in mortgage-backed bonds.

A spokesman for Citigroup declined to comment on the timing of any announcement regarding a new chief executive and chairman.

Mr Pandit is not perceived to be sufficiently experienced to be able to handle the dual role of chairman and chief executive that his predecessor held. He joined the bank only this year and, while an accomplished investment banker, lacks experience of retail banking.

Shareholders are anxious that the two appointments are made quickly. The bank is seen to be rudderless during one of the most challenging markets in recent years. Citigroup is still counting the cost of its losses in bonds backed by sub-prime mortgages – it is expected that the bank will write off another $11 billion (£5.4 billion) this month. It has a portfolio of sub-prime related investments worth about $55 billion.

The search for a new chief executive is being spearheaded by four directors - Mr Rubin; Richard Parsons, the chief executive of Time Warner; Franklin Thomas, former head of the Ford Foundation; and Alain Belda, the chief executive of Alcoa. The bank has also hired the headhunter Prince Goldsmith. It is understood that Mr Willumstad was interviewed by the directors last week.

Mr Pandit, who is 50 and was born in India, is believed to be the favoured choice of Mr Rubin. He joined Citigroup in the summer after the bank bought his hedge fund Old Lane Partners. He now heads Citigroup’s investment banking business and its alternative investments arm. Last week Josef Ackerman, the chief executive of Deutsche Bank, was reported to have turned down the job, and Henry Paulson, the US Treasury Secretary, dismissed suggestions that he would relinquish his Washington role and join Citigroup. Other bankers, such as Sir Fred Goodwin, chief executive of Royal Bank of Scotland, and Bob Diamond, head of Barclays Capital, have also been named as possible candidates.

Citigroup is far from alone as a casualty of the sub-prime mortgage crisis. Most of Wall Street’s biggest banks bought debt that was backed by mortgages that had been sold to Americans with low incomes and poor credit histories. As US property prices endured their most severe slowdown for 16 years and mortgage repayments rose, many homeowners fell into arrears, rendering their mortgages, bought by the banks, valueless.

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