When it comes to Citigroup (C) these days, the outlook is usually glum. Wall Street analysts unanimously expect a loss when the beleaguered global bank reports its results for the fourth quarter and full year on Tuesday. What could raise investors' spirits, however, is any sign that the complex bank is starting to get its house in order.CEO Vikram Pandit is under pressure to demonstrate that he can pare down its bad assets. He must also to show that he has gained some level of understanding of its operations and knows which direction the bank is heading in terms of growth in the coming years.

'Make Or Break Year'

"This is really a make it or break it year for Pandit," says Jamie Cox, managing partner at Harris Financial Group, a financial planning firm with $400 million in assets, and a Citi shareholder. Pandit has managed to survive despite doubts even from some financial regulators over whether he is up to the top job.

Analysts polled by Thomson Reuters expect Citi to post a loss of 33 cents a share in the fourth quarter, compared to a loss of $2.44 a share in the same quarter of 2008. Jason Goldberg, an analyst at Barclays, expects Citi to charge off expenses related to its $20 billion repayment last month of TARP, or the Troubled Asset Relief Program. The government had bailed out Citi two times in the last 18 months, after the bank was brought down to its knees from a pounding of its stock in the financial markets because of uncertainty surrounding the value of the toxic assets on its balance sheet.

Citi is the only large bank from among the Big Four, besides Bank of America (BAC), JP Morgan Chase (JPM) and Wells Fargo (WFC), that is still not out from under the shadow of the government bailout. Despite the $20 billion repayment, the U.S. Treasury is still the bank's single largest shareholder, with 7.7 million common shares and another $5.3 billion in preferred shares.

Stock In The Doldrums

Citi's stock continues to languish at under $3.50 apiece, mostly because investors feel that the bank has lost focus on its core businesses -- both consumer and institutional. On the consumer side, both its credit card and mortgage business continues to be weighed down by American consumer woes, reflecting the country's jobless rate of over 10%. For instance, Citi's consumer loans that were unpaid by 90 days or more, which included those on its branded credit cards, grew to 1.89% in the third quarter of 2009, up from 1.68% in the previous quarter.

While it continues to be hamstrung from losses in its consumer business, its investment banking unit hasn't been able to take advantage of the big deluge of corporate debt and equity underwriting that has propelled the earnings of other Wall Street rivals like JP Morgan and Goldman Sachs (GS).

The bank has essentially split into Citicorp, or its core consumer and investment banking operations, and Citi Holdings, which holds the toxic assets that the firm has been trying to shed. What investors are waiting to hear is how the company plans on generating new business or reigniting its core offering.

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