April 18 (Bloomberg) -- Citigroup Inc. Chief Executive Officer Vikram Pandit said the biggest U.S. bank plans to slash costs by as much as 20 percent, the Financial Times reported.

It is ``clearly feasible'' for Citigroup to take ``10, 15, 20 percent'' off its cost base, especially in information technology and operations, the FT cited Pandit as saying. The cuts would include job losses among the bank's 370,000 employees, Pandit said. Citigroup is expected to report a first-quarter loss of $4.75 billion today, based on a Bloomberg survey of six analysts.

Pandit, who took charge in December, is battling to return the bank to profitability and halt a 55 percent drop in market value in the past year that was triggered by $21.4 billion of writedowns. The former Morgan Stanley executive bailed out 10 investment funds, replaced his chief risk officer and raised $30 billion to contain fallout from the subprime mortgage collapse.

``Pandit is doing what needs to be done, focusing on capital management, allocating capital to areas that he wants to grow and exiting businesses that he doesn't think are core,'' said Peter Kovalski, portfolio manager at Alpine Woods Investments in Purchase, New York, which oversees $12 billion, including about 32,000 Citigroup shares. ``The variable he has no control over is the global economy, and how much further deterioration there's going to be.''

Citigroup rose 4.6 percent to $25.14 by 11:07 a.m. in Frankfurt today from its closing price of $24.03 in New York Stock Exchange composite trading yesterday. The bank's drop in the past 12 months exceeds the 13 percent slump at New York-based JPMorgan Chase & Co. and a 28 percent decline by Bank of America Corp., based in Charlotte, North Carolina.

Subprime Investments

Richard Tesvich, a Citigroup spokesman in Hong Kong, declined to comment on the Financial Times report. Citigroup posted a record $9.8 billion loss for the fourth quarter.

Some of Citigroup's largest competitors are reporting lower profit, rather than losses. JPMorgan, the third-biggest U.S. bank, posted a 50 percent drop in first-quarter earnings on $5.1 billion of writedowns and provisions and Chief Executive Officer Jamie Dimon told reporters on a conference that the credit-market crisis may be as much as 80 percent over.

Citigroup has been hobbled by subprime-mortgage investments made under former Chief Executive Officer Charles O. ``Chuck'' Prince, who resigned under pressure last November. The company's governance so appalled shareholder advocates that proxy adviser RiskMetrics Group Inc. last week urged investors to vote against four board members, including Alcoa Inc. Chairman Alain Belda and Xerox Corp. Chairwoman Anne Mulcahy.

Review Ending

Pandit, nearing the end of a six-month companywide review that has taken him to offices in Warsaw, Istanbul and Seoul, has changed managers, putting former Morgan Stanley colleague John Havens in charge of trading and investment banking, moving U.S. consumer head Steve Freiberg to head a new credit-card division and recruiting former Wells Fargo & Co. executive Terri Dial to oversee consumer banking in the U.S.

Pandit's cost-reduction targets suggest that Citigroup may cut more jobs than expected, the Financial Times said. Analysts have forecast the company may eliminate about 25,000 jobs over the next few months after two years of rapid growth, according to the newspaper.

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

Last Updated: April 18, 2008 05:43 EDT