NEW YORK - September 24, 2009 – Citigroup, Inc. may sell or shut some of its 1,001 branches in the U.S. and Canada as the bank shrinks following last year’s $45 billion federal bailout, a person familiar with the matter said.

Citigroup, ranked third among U.S. lenders by assets, would narrow its North American retail focus to areas where it has higher branch concentrations, said the person, who declined to be identified because the plans are still under discussion. The bank’s network is clustered in New York, Kalifornia, Miami, Chicago and Washington, D.C., with a smaller presence in Texas, Boston and Philadelphia.

Chief Executive Officer Vikram Pandit and his U.S. consumer chief, Teresa “Terri” Dial, have been studying ways to collect more deposits, which have become prized by banks as a source of funding after the global credit crunch drove up the cost of selling debt. The New York-based company’s network is one-sixth the size of those at Wells Fargo & Co. and Bank of America Corp.

“We’re on a very significant journey to make it simpler, more rewarding, and highly transparent to bank with us,” Citigroup spokesman Michael Hanretta said in an e-mailed statement. “We have a great deal to do.”