According to Wall Street Journal reports, the federal government is planning a nearly 40 percent stake in Citigroup - the much-foreseeable semi-nationalization move to pull the troubled banking giant out of the dire straits!

The to-be-increased government participation in the bank appears to be the last resort, with the company already having received two cash infusions of $25 billion and $20 billion in October and November respectively.

Marred by most of the recession-inflicted troubles being faced the banking industry worldwide, Citigroup is entirely dependent on federal support for financing of its operations and insuring billions of its risky assets.

The projected proceedings underway imply that the bank's government-owned $45 billion piece in preferred shares would be converted into common stock. It is being hoped that the conversion of preferred stock will bring in more equity capital, thereby helping Citigroup clear a new "stress test", to be administered by the federal regulators to 20-odd banking sector bigwigs.

In the opinion of the analysts, there are ample indications to conclude that, in the times to come, Citigroup will definitely become a much smaller and less profitable company as compared t than its past.

Analyst Michael Mayo, of Deutsche Bank, remarked: "A year from now, Citigroup will be more like a large financial utility - less risk, less leverage, less growth!"