Updated from 2:59 p.m. EST

Citigroup

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shares surged as much as 9% Tuesday afternoon, after CEO Vikram Pandit unveiled the leadership of the two new businesses into which it is splitting itself.

Citicorp, the so-called "good bank" which will be comprised of its global institutional business as well as continuing consumer bank, will be run by John Havens, Citi's CEO of institutional clients group and head of its alternative investments arm.

Citi Holdings, the so-called "bad bank" that will be comprised of its brokerage and asset management arm, consumer finance and a special asset pool, will be run by Mike Corbat on an interim basis, until a permanent CEO is appointed. Corbat, who most recently was the company's head of wealth management and has been with the firm for the past 24 years, will also be in charge of the brokerage and asset management unit, which includes the Smith Barney joint venture between

Morgan Stanley

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and Citi.

Pandit named the leaders during a luncheon presentation at the company's annual financial services conference, hosted at The Waldorf-Astoria in New York.

"We firmly believe that the new structure not only provides clarity to our strategy, our management and our organization but it also opens a clear and faster way back to profitability," he said during the presentation.

Earlier this month, Citi outlined a plan to break up its much-maligned

financial supermarket model

, after reporting a fourth-quarter loss of $8.29 billion, or $1.72 a share. Results included $6.1 billion in net credit losses and a $6 billion net reserve build for future loan losses.

Of the 300,000 people at Citi, roughly one-third will be employed through Citi Holdings, Pandit said.

Pandit reiterated during the presentation that his priority is to restore the company to profitability. The company also attempted to shed some light on the internal value within its bad bank structure.

"I am sure one of the questions you have is what is Citi Holdings likely to be worth in the next few years," Pandit said. "Our estimates tell us that this is a company with positive value."

Among the financials Citi provided on Tuesday, Citi Holdings would have turned a profit of $8.6 billion in 2008, excluding taxes and provisions, compared to $14.9 billion in 2007, according to Citi estimates. Including provisions, the $860-billion asset Citi Holdings posted a loss of approximately $56.7 billion last year, compared to a loss of $16.7 billion in 2007, it said.

The company has also taken roughly $50 billion of marks against the riskiest of its assets, held now in Citi Holdings, Pandit said.

Citi has "marked many assets at prices that exceeded their expected lifetime credit losses because of the liquidity premium in the markets," he said. "At these marks we hope these distressed assets provide rate of returns analogous to distressed funds which are in the plus/minus 20% range."

The company will begin to provide more complete financial for Citi Holdings beginning in the second quarter, Pandit said.

Citicorp, on the other hand, would have made $22.3 billion last year before taxes and provisions and $21.4 billion in 2007, the company said. Including provisions Citicorp would have made $13.6 billion last year.

"Citicorp has incredible earnings power, Pandit said. "And I am very excited about operating its business and restoring it to the proper luster that it once was."

Citi's five current heads of regional consumer and commercial banking franchises will remain in place and assume responsibility for Citicorp's credit card businesses in their respective regions, it said.

They include Terri Dial, who remains head of Citi's global consumer strategy and CEO of its North American consumer banking business; Ajay Banga, who remains head of Citigroup Asia-Pacific; Manuel Medina-Mora, who remains CEO of Citigroup Latin America and Mexico; William Mills, who is continuing as CEO of Citigroup Western Europe, Middle East and Africa; and Shirish Apte, the head of Citigroup Central and Eastern Europe.

Steve Freiberg, Citi's former head of global cards and a former head of its global consumer group, will oversee Citi Holdings' consumer financial businesses

Portfolio manager Rick Stuckey will run the special asset pool, which includes the $300 billion in assets the federal government agreed to backstop last year, the company said.

Pandit's leadership appointments come after the company said earlier Tuesday that, under pressure from shareholders and regulators to rein in expenses in light of the $45 billion preferred equity stake the government has made through the Troubled Asset Relief Program, that it would scrap its plans to purchase a new $50 million corporate jet.

Citi shares closed up 6.6% to $3.55 Tuesday.