NEW YORK?The nation?s banking giants, Citigroup and Bank of America, released dismal earnings reports Friday but also took steps to try to improve their futures.

Citigroup?after suffering a loss of $8.29 billion, its fifth straight quarterly deficit?announced that it was splitting the bank in two.

And Bank of America reported a $2.39-billion loss for the three months ended in December, just hours after the US Treasury agreed to provide a $20-billion lifeline to help it survive the losses surrounding its recent acquisition of Merrill Lynch & Co.

The first piece of the divided Citigroup, dubbed Citicorp, will focus on traditional banking around the world and include the retail bank; the corporate and investment bank; the private bank, which serves wealthy individuals; and global transaction services.

The second, Citi Holdings, will hold the company?s riskier assets and tougher-to-manage ventures. It will account for $850 billion of Citigroup?s $1.95 trillion in assets and include Citi?s asset management and consumer finance segments, including CitiMortgage and CitiFinancial.

It will also be in charge of Citi?s 49-percent stake in the joint brokerage with Morgan Stanley?a deal that was announced earlier this week?and the pool of about $300 billion in mortgages and other risky assets that the US government agreed to backstop late last year.

The New York-based bank?s fourth-quarter loss amounted to $1.72 a share. Analysts expected a loss of $1.31 a share. For the year-ago fourth quarter, Citigroup had a net loss of $9.83 billion, or $1.99 a share.

Revenue fell 13 percent to $5.6 billion from a year ago.

For all of 2008, Citi suffered a net loss of $18.72 billion, or $3.88 a share. That compares with a profit of $3.62 billion, or 72 cents a share, in 2007.

Citigroup shares closed Friday at $3.50, down 33 cents, or 8.6 percent.

Unlike Citigroup, Bank of America still appeared committed to saving the idea of a financial supermarket.

Its new $20-billion infusion of government money is in addition to $25 billion in rescue funds Bank of America has already received. The $45 billion of total government aid is the same amount Citigroup has received.

In connection with the package, Bank of America slashed its quarterly dividend to a penny from 32 cents and agreed to further limit executive pay and work more intensively to modify the mortgages of distressed homeowners.

Bank of America?s fourth-quarter loss amounted to 48 cents a share, down sharply from a profit of $215 million, or 5 cents a share, a year ago.

The bank cited rising credit costs, significant write-downs and trading losses in its capital markets businesses amid the deepening recession.

Meanwhile, Merrill Lynch posted a loss of $15.31 billion, or $9.62 a share, for the period?underscoring Bank of America?s assertion that it needed the extra US aid to absorb the investment bank?s bad mortgage bets.

Bank of America shares closed Friday at $7.18, down $1.14, or 13.7 percent.

Meanwhile, Citigroup Inc. shareholders aren?t buying Vikram Pandit?s attempt to salvage the bank by splitting it in two.

Citigroup shares tumbled to a 16-year low on Jan. 16 after Pandit, the US bank?s 52-year-old chief executive, said he would undo a decade of acquisitions by separating the bank into two units, Citicorp and Citi Holdings.

The problem: Nothing?not $45 billion of US government funds, not federal guarantees on $301 billion of debt, not a pledge to dump non-core assets?can stave off the worst financial crisis since the Great Depression. Already crippled by trading losses on mortgage bonds, the bank faces credit-card losses that surged to a record in the fourth quarter.

?The losses from the investment banking businesses wiped out any margin for error that Citi might have had to be able to weather the storm of the US consumer defaulting on his debts,? said James Ellman, president of San Francisco-based money manager Seacliff Capital LLC.

After initially rallying 17 percent Friday on news of Pandit?s planned reorganization, Citigroup shares fell, closing down almost 9 percent at $3.50. At that level, it?s below the $3.77 it dropped to on Nov. 21, when the bank entered talks with officials from the US Treasury Department and Federal Reserve over a second round of rescue funds.

Citigroup chief financial officer Gary Crittenden said the bank has had ?no conversations at all about additional capital from the government.?

Analysts aren?t speculating?as they were in November?that nervous depositors might pull out their savings and erode the money Citigroup uses to fund its operations. Total deposits stood at $774 billion at the end of December, little changed from the end of September, Citigroup said. AP with Bloomberg