Citi plans to put UK online banking unit Egg up for auction as part of its ongoing disposal of non-core assets, according to the Financial Times.
The US giant acquired Egg, which has about two million customers, from insurer Prudential for around £575 million in 2007 as it looked to gain a foothold in the UK market.
However, the bank has since been hit hard by the financial crisis, prompting it to hive off non-core businesses into a Citi Holdings unit ready for sale.
The bank has been holding talks with potential buyers of Egg for some time but is now set to step up the process with an auction after the summer, says the FT citing "people close to the situation".
Santander and Tesco are cited as possible bidders but not Virgin, with a price of around $500 million floated.
The bank is refusing to comment directly on the speculation but has confirmed that Egg is part of its Citi Holdings.