Citigroup is expected to cut up to 32,000 jobs to stem rising losses.

The world’s largest bank could lose 10 per cent of its workforce when it unveils full-year results next Tuesday. It is also believed to be considering the sale of non-core assets to raise capital.

However, Meredith Whitney, one of Wall Street’s top banking analysts, said that the only way Citigroup could repair its balance sheet would be by selling Smith Barney, the broker, for about $25 billion (£12.7 billion).

Ms Whitney, an analyst at CIBC World Markets, told The Times: “In these markets banks can only sell their best assets. The sale of non-core ones would not be material enough.

“To really reduce their leveraging, Citigroup have to sell a chunk of their mortgage or card portfolio, but there is no market for those assets. The only asset they could sell of any size is Smith Barney.”

Ms Whitney said that JPMorgan Chase had previously expressed an interest in the broker and that Credit Suisse was another potential bidder.

Citigroup is expected to write down as much as $18.7 billion in the fourth quarter of the year, to cover losses on bonds backed by American sub-prime mortgages, and to slash its dividend by 40 per cent. Yesterday, Citigroup said that reports “on specific numbers are not factual”.

Wall Street was especially gloomy yesterday after David Rosenberg, the chief North American economist at Merrill Lynch, said that the United States had already slipped into recession. Mr Rosenberg believes that weak employment data and slowing retail sales performance point to the US economy being in recession.

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