Citigroup Inc. plans to split into two companies after the troubled U.S. banking giant reported an US$8.3 billion net loss for the fourth quarter, and an US$18.7 billion loss for the full year 2008.

On Friday, the bank said its results reflect the negative impact from US$7.8 billion in revenue marks in Securities and Banking, a US$5.3 billion downward credit value adjustment on derivative positions, US$2.5 billion of losses in private equity and equity investments, US$2.0 billion of restructuring costs, and a US$6.0 billion net loan loss reserve build.

On the heels of those results, the bank announced that it will separate the company into two separate businesses — Citicorp and Citi Holdings. Citicorp will include the company’s global universal bank, whereas Citi Holdings will be made up of brokerage and retail asset management, local consumer finance and a special asset pool.

Citi CEO Vikram Pandit said, “With lower risk and a streamlined set of businesses, we expect Citicorp to be a high-return and high-growth business. And with the new Citi Holdings, we will be able to tighten our focus on risk management and credit quality for businesses with strong market positions but that are not central to our core franchise.”