NEW YORK, Dec 14: Citigroup’s move to shift ailing investments on to its balance sheet shows radical steps to right its finances, but analysts said on Friday the banking giant’s financial woes had worsened.

Citigroup announced late Thursday that it had decided to move a vast $49bn in stressed investments on to its balance sheet as it vies to stem multibillion-dollar losses largely tied to the US housing meltdown.

Moody’s downgraded some of its credit ratings on Citigroup and analysts slashed their price targets on its stock after the financial colossus appeared to have a change of heart over the big investment portfolio.

The global banking powerhouse is placing much more stress on its balance sheet with the move, but analysts said its other option was to risk a fire sale of the assets including soured mortgage investments which could have been much more damaging.

The dramatic move seems to mark an abrupt change of tack as Citigroup had joined forces with other large banks to create a rescue fund for such ailing investments known as Structured Investment Vehicles (SIVs).

The plan had received the blessing of the US Treasury which is headed by Henry Paulson, a former chief executive of Wall Street investment bank Goldman Sachs.

Under US accounting laws, Citigroup was allowed to maintain the investment vehicles -- which were valued at $87 billion in August -- off its balance sheet.

Moody’s said Citigroup’s finances will remain under pressure.

—AFP