Citigroup Inc. is poised to become the latest banking company to change the way it participates in syndicated loans.

The company is expected in the next few days to announce plans for its loan syndication business, and may choose - as other large lenders have done - to reserve them for corporate clients that make use of Citigroup's other, fee-based services.

Like other banking companies, Citigroup is seen as not wanting to "rent out" its balance sheet, and as growing less tolerant of companies who want it for lending but nothing else.

According to a research note by Merrill Lynch analyst Judah S. Kraushaar this week, "Citigroup's management will be hard-nosed on expense-risk management." The bank, he wrote, "likely will restructure its loan syndication business in a drive to reduce loans held on the balance sheet and improve credit related return on equities."

Mr. Kraushaar, who rates Citigroup as a "buy," said its management "is keen to transition toward more mark-to-market discipline for corporate loans."

Banks are moving away from evaluating the profitability of particular loans, and instead looking at the overall picture for each client, taking into account revenue generated from other services, such as capital markets and asset management services.

J.P. Morgan Chase & Co. is an example of a bank looking at the total picture, said Diana P. Yates, an analyst at A.G. Edwards & Sons. "If the payback isn't there, then they will pull back from those relationships," she said.

Bank of America Corp., the second-largest U.S. banking company, said in December it was committed to following a closely controlled plan of action with its syndicated loans, promising shareholders that it would make corporate loans only to clients who contribute to the bank's fee-based business lines.

The bank recently followed through on that commitment when it pulled out of a $2.5 billion loan to Tyson Foods Inc. in January.

When Tyson, the Springdale, Ark., chicken producer, decided to pass over Bank of America, its longtime lender, in favor of J.P. Morgan Chase and Merrill Lynch & Co., as co-lead arrangers, Bank of America pulled out of the syndicate altogether.

A deterioration of asset quality and a slowing U.S. economy are pushing banks to become more controlled lenders, said Catherine Murray, an analyst at J.P. Morgan Chase.

Mellon Financial Corp., PNC Financial Services Group, Wachovia Corp., and First Union Corp. have already started taking more disciplined approaches to their syndicated loan businesses, Ms. Murray said, and added that she expects Bank One Corp. to follow.

"Most banks are looking at the profitability of the entire relationship and normally clients who use more than one product are more profitable," Ms. Murray said.

As more conservative lending and enhanced attention to profitability emerge as renewed priorities, analysts can be reassured that banks are appropriately pricing the risk they are taking on their balance sheet, she said.

A.G. Edwards' Ms. Yates said, "We hope that our lenders are rational all the time, not just in the weaker times," and noted that the troubled loans coming to light now were underwritten a number of years ago.

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