Hundreds of jobs in London are expected to disappear as Citigroup, the American financial services company, cuts a further 1,800 positions worldwide from its banking and markets operation.

Citigroup, which has announced 21,200 redundancies in the past year, is eliminating nearly 2,000 additional positions in its institutional clients division. The division includes investment banking and trading, as well as hedge fund and private equity services.

It is not known precisely how many jobs will go in the City, but the figure is expected to run into the hundreds. London, where the group is based at Canary Wharf, is a key part of the bank’s operation, and the number of redundancies it faces is second only to the New York office. About 9,000 of the 60,000 staff employed globally by Citigroup’s institutional clients group are based in London. In total, Citigroup employs about 320,000 people worldwide, with about 11,500 working in London.

Citigroup would not comment on the number of positions that will be shed in its latest round of job cuts, although it did concede that further positions had been eliminated and that more would be in the future.

A Citigroup spokesman said: “This year we will have a larger number of reductions as we continue to strengthen the business and lower our expense base.” The redundancies emerged less than a week after the Centre for Economic Business Research increased its estimate for the number of job losses in the City this year from 6,500 three months ago, to 10,000.

In addition to Citigroup’s previous cuts, several thousand jobs have been eliminated by Morgan Stanley, Goldman Sachs, Deutsche Bank and Merrill Lynch, as the world’s biggest financial groups have dismissed more than 30,000 staff since September.

Citigroup has been among the hardest hit by the plummeting valuations of bonds backed by sub-prime mortgages, which have so far has led to nearly $200 billion (£101 billion) of writedowns by banks. The bank has taken $18.1 billion of writedowns so far and reported a loss of nearly $10 billion in the fourth quarter.

These writedowns have wiped out almost half of Citigroup’s value since October and led to the ousting of Chuck Prince, its chief executive, in November. His replacement, Vikram Pandit, has said that he will carry out a “front-to-back” review of the company’s expenses, which have severely hampered the group in recent years.

This week Mr Pandit promoted John Havens, a former colleague at Morgan Stanley, to oversee Citigroup’s trading, investment banking and hedge fund operations. That division reported a $4.6 billion loss last year, compared with an $8.4 billion profit the year before.

Meanwhile, Barney Frank, an influential American lawmaker, called for the US Congress to create a “financial services risk regulator” to reduce the chance of further bankruptcies and credit crunches. Responding to the forced the sale of Bear Stearns to JPMorgan, Mr Frank, chairman of the House Financial Services Committee, said that the US should consider establishing an entity to oversee and supervise all credit-creating institutions.

Citi life

— Citigroup is among the bond investors hardest hit by the sub-prime mortgage meltdown, recording about $18 billion of writedowns on securities backed by home loans, with further losses expected

— In the past year Citigroup announced two rounds of job cuts, the first of 17,000 and the second of 4,200. The latest 1,800 redundancies are in addition and are not expected to be the last

— Citigroup pioneered the so-called financial services supermarket, bringing together investment and retail banking and consumer finance. The group has long faced calls to split up the operations.

— In November Citigroup's Charles Prince became the second chief executive of an American investment bank to resign over the credit crunch. Stan O'Neal of Merrill Lynch was the first

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