REFILE-WRAPUP 2-Citigroup aims to sell $400 billion of assets

(Refiles to correct spelling of Citigroup CEO's first name in paragraph 2) (Adds details throughout, adds analysts' comments)

PHILADELPHIA, May 9 (Reuters) - Citigroup Inc (C.N: Quote, Profile, Research), the largest U.S. bank, said on Friday it aims to shed $400 billion of assets -- nearly 20 percent of its total -- over the next two to three years to become more efficient and profitable.

Citi's newly installed chief executive, Vikram Pandit, has faced demands from investors that he slash costs, shed poorly performing businesses and even split up the bank.

Some investors view Citi, built over two decades by Sanford "Sandy" Weill, as too big to govern, a charge that Pandit's predecessor, Charles Prince, routinely rejected.

Citi, hit hard by the subprime mortgage meltdown and ensuing turmoil, said it has about $500 billion of "legacy assets," and it expects to pare those to less than $100 billion within two to three years.

Pandit said he sees three stages for Citi: getting fit, restructuring, and maximizing the company. These stages, though, will take time, he cautioned.

The restructuring could improve the bank's results early, but the overall program will require patience, Pandit said.

"Basically Citigroup wants to reduce costs and get back to double digit growth rates. The new management is taking their first major steps in a bid to return to profitability," said William Lefkowitz, options strategist at brokerage firm vFinance Investments in New York.

The assets include real estate, leveraged commitments, subprime collaterized debt obligations and structured investment vehicles. Pandit said the bank will reduce these assets in an orderly fashion.