March 31 (Bloomberg) -- Citigroup Inc., battling to restore profit after a record loss, will set up an independent credit-card unit and overhaul consumer banking along geographical lines, two people with direct knowledge of the plan said.

Steven Freiberg, the current co-head of consumer banking, will run the card unit, the people said, asking not to be identified before an announcement that may come as early as today. The rest of the consumer group, mainly bank branches and non-bank lending, will be led by five regional heads, the people said.

Vikram Pandit, who succeeded Charles O. ``Chuck'' Prince as Citigroup Chief Executive Officer in December, is reshuffling management at the New York-based bank after it lost more than half its market value in five months. The consumer chiefs will all report to Pandit as he bids to halt a profit decline for a unit that contributes 70 percent of revenue and was previously run by just two people, Freiberg and Ajay Banga.

``One should be supportive of major changes when past performance has been disappointing,'' said Guy De Blonay, a director at New Star Asset Management Group Plc in London who helps manage $1.2 billion in financial stocks. ``In being quite aggressive in removing people and getting in fresh blood, hopefully they can turn around the story.''

Dial, Banga

Terri Dial, who is joining from London-based Lloyds TSB Group Plc, will oversee consumer banking in the U.S., and Banga will be responsible for Asia, the people said. William Mills will run Western Europe, Shirish Apte takes charge of Central and Eastern Europe and Manuel Medina-Mora will head Mexico and Latin America, they said.

Christina Pretto, a New York-based spokeswoman for Citigroup, didn't return a message left on her cell phone's voicemail.

Citigroup had a net loss of almost $10 billion in the fourth quarter because of subprime-mortgage writedowns at its trading business. Pandit is reducing loans and securities to shrink the bank's $2.2 trillion of assets, and has slashed more than 6,000 jobs.

Citigroup has tumbled 29 percent this year in New York trading to $20.83 as of March 28 amid more than $20 billion of credit losses. Oppenheimer & Co. analyst Meredith Whitney last week quadrupled her estimate of Citigroup's first-quarter loss to $1.15 a share, or $6.6 billion, predicting additional writedowns. The bank is set to report results for the three-month period ending today on April 18.

Lower Profit

Pandit, conducting a review of Citigroup that has taken him to offices in Warsaw, Istanbul and Seoul, said in a March 5 memo to the bank's more than 300,000 employees that he planned to ``reengineer businesses to more directly address the needs of our clients.'' The review is scheduled to be completed in May.

Profit at Citigroup's consumer unit fell 35 percent last year to $7.87 billion as rising delinquencies on mortgages and auto loans forced the bank to set aside more reserves for losses.

Dial will oversee the global strategy for Citigroup's consumer unit, the people said. The 58-year-old executive worked for almost 30 years at San Francisco-based Wells Fargo & Co., where she ran the bank's California business.

Revenue at the Citigroup U.S. consumer unit that Dial will lead rose 6 percent to $8.4 billion in the fourth quarter, compared with a year earlier. Globally, the division's revenue climbed 21 percent to $15.5 billion.

The five regional heads will also be responsible for coordinating with executives of the global business lines, namely investment-banking, wealth management and credit cards, they said.

Citigroup operates in more than 100 countries.

To contact the reporters on this story: Bradley Keoun in New York at bkeoun@bloomberg.net.

Last Updated: March 31, 2008 05:28 EDT