Citibank’s financial supermarket is not so super anymore with $10 billion in losses in its latest quarter, a stock price hovering at $3.1 representing a 16-year low. The U.S. Federal government is considering how to split up the largest banking giant as its losses continue to mount and it grows increasingly obvious that almost no amount of government assistance will be able to save the giant financial services firm. Citibank struck a deal on Tuesday to effectively sell control of its Smith Barney brokerage unit to Morgan Stanley.

Citibank, formerly the City Bank of New York, was founded in 1812. In 1894, it was considered the largest bank in the United States, and by 1930 the largest bank in the world. Citi has had a history of severe ups and downs, rooted in bad real estate loans during the economic downturn of the 1990’s. Often deemed “too big to fail”, many in the industry would like to see Citi return to a smaller size so that its failure would not represent a systemic crash on the financial system. A nearly $600 million investment from a Saudi billionaire Prince Alwaleed bin Talal has saved it in the past. But now things are different. The financial supermarket that was pieced together by Sandy Weil over the past 15 years is in dire straits. Many expect to see Citi’s reorganization leaving it as unrecognizable when compared to its present day holdings and various units and services. The one-stop financial services shop of Citi is thought to be history. Mr. Weill onetime CEO and the architect of its rise as a financial supermarket stepped down as CEO in 2003.

The U.S. Federal Reserve’s TARP fund has agreed to backstop some $250 billion of bad loans. Shareholders anticipate further losses and equity dilution; Citi is worth under $21 billion.

Citibank’s financial trouble stems from investment in subprime loans. When returns of their troubled business units and products did not materialize, high level management did not halt their momentum. They continued to invest and kept their borrowing off its books by reclassifying them in instruments called SIV’s. This kept the borrowing off its balance sheet in so-called conduits or SIVs (structured investment vehicles). On the surface, the company’s earnings grew. The SIVs allowed for huge borrowings. The SIVs collapsed when short-term financing dried up, and are now on Citi’s balance sheet.

Currently, the bank will maintain its branch banking, advising on mergers, underwriting securities, processing payments, corporate lending and handling trades for clients. It is expected that CEO Pandit will sell off large chunks of the firm, including the CitiFinancial consumer-lending unit, and it either become a smaller independent bank, or a subsidiary of an existent larger entity.