The budget-conscious style of the former Travelers Group is asserting itself as Citigroup approaches decisions on which consumer businesses to cut back or eliminate.

Citigroup has signaled its intention to pull back from "nonstrategic" activities and concentrate resources in higher-growth areas. With former Travelers executive Robert I. Lipp overseeing the streamlining, the process is expected to be precisely and objectively focused on business-unit costs and returns.

Mr. Lipp, who is co-heading consumer operations with Citicorp counterpart William I. Campbell, was not available for comment, but word is getting out about Mr. Lipp's briefings on the subject with securities analysts.

The pruning reportedly will begin on the fringes-in areas where support staffs are considered bloated or in businesses that do not clear hurdle rates.

Analysts said mortgages, automobile and student lending, and mutual funds are among the operations lacking the scale to make them profitable enough and worthy of investment.

These observers said it was unlikely, however, that Citigroup would completely abandon any product line.

Outside experts said Citigroup is confronting issues that many of its competitors will have to face as well.

"It's an early sign of something that is going to happen at all the mega-financial firms being created now," said veteran banking consultant Edward Furash, chairman of Monument Financial Group, Alexandria, Va.

"Just because you've put the businesses into a larger company doesn't mean you've changed the earnings dynamic," Mr. Furash said. "To be large, you have to be a category killer."

The Citigroup process is part of a $975 million expense-saving initiative announced last month. The restructuring, which the company said was necessary as a result of the Oct. 8 merger of Citicorp and Travelers, would include elimination of 10,400 jobs.

"Now is a good time to take stock and either develop a very solid growth plan for these smaller businesses or refocus energies on the more complex business issues of cross-selling, integration, and managing multiple geographies," said Seamus McMahon, a consultant at First Manhattan Consulting Group.

"Every erg of energy spent on these small businesses that doesn't pay off is wasted," he said.

Typical of the kind of business to which Citibank will commit is credit cards. It is the longtime industry leader, with more than $60 billion of loans outstanding. It also ranks second in consumer banking, with a 10% market share, in its home market of metropolitan New York.

But the company is a relative laggard in other business lines.

In mortgage originations, for example, Citibank ranks 18th, according to data compiled by American Banker, well behind market leaders Norwest Mortgage, now a part of Wells Fargo & Co., and Countrywide Home Loans Inc., a unit of Countrywide Credit Industries.

Citibank is No. 2 to Chase Manhattan Corp. in student lending, according to the Department of Education, but its $1.6 billion portfolio is small in relation to other businesses.

In mutual funds Citibank is 20th, far behind leaders Mellon Bank Corp. and First Union Corp., according to Lipper Inc.

The U.S. branch banking network outside New York-in such markets as Chicago, Miami, California, and Washington, D.C.-turned profitable only last year, the bank has said. Branch operations in some foreign markets, once promising, have also begun to show lackluster results, analysts added.

These are the kinds of underperforming units that are most subject to scrutiny, analysts said.

"Those businesses that are not performing to a reasonable standard can't hide anymore," said George Bicher, an analyst at BT Alex. Brown. "They are going to force them out."

The selectivity would mark a change in direction for Citibank, which has built its consumer marketing strategy around four "life-cycle" segments- students, young families and singles, established families, and retirees.

Product positioning is tailored to the segments. Student loans, for example, are marketed to the first and third categories. Trust and estate planning is targeted to the fourth group. Basic products like credit cards and deposit accounts are matched with all segments.

The life-cycle approach has a downside, Mr. McMahon said. "Being in every product line means you will be a very subscale player in at least some of them," he noted.

Bradley Ball, an analyst at Credit Suisse First Boston, said, "Mr. Lipp seems to be a little more pragmatic. They could scale back businesses like mortgages and student loans to devote more of those resources to build their alternate delivery systems nationally."

Managers are being made accountable for revenues and profits in their businesses, a Travelers practice, the analysts said. Support functions such as marketing are being streamlined and centralized.

The review is reaching into all domestic and overseas activities, the bank said.

"There are pieces of businesses in various countries that will likely be sold or eliminated," said Diane Glossman, an analyst at Lehman Brothers.

Travelers Group, an active acquirer, was accustomed to reviewing businesses in search of hidden value, a skill the old Citicorp never really developed.

Citigroup now seems to be benefiting from Travelers' expertise in this area, Ms. Glossman said. "There is a whole new set of eyes looking at these businesses."

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