March 31 (Bloomberg) -- Citigroup Inc., battling to restore credibility 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 in December, is racing to reposition the New York-based bank after it lost more than half its market value in five months. The changes address concern that consumer banking, which contributes 70 percent of revenue, was too big to be run by just two people, Freiberg and Ajay 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 shedding loans and securities to shrink the bank's $2.2 trillion of assets, and has slashed more than 6,000 jobs.

Pandit's Review

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 regional executives, who will report directly to Pandit, 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 at least 100 countries.

The bank's shares have tumbled 29 percent this year in New York trading to $20.83 as of March 28. 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, on expectations of additional writedowns. The bank is set to report quarterly results on April 18.

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

Last Updated: March 31, 2008 01:55 EDT