To move Citigroup forward, new chief Michael Corbat may have to keep looking back.

From 2009 until the beginning of this year, Mr. Corbat ran what is known as Citi Holdings, a collection of assets the bank decided during the crisis that it would shed. He managed to pare this junk heap by about $600 billion. But at the end of the third quarter, it still stood at $171 billion.

Now, as he takes Citi's helm following Vikram Pandit's surprise resignation Tuesday, those assets may again occupy much of his attention. Though they appear to represent only a small part of the balance sheet, they will actuallyaccount for 24% of assets that are ranked according to risk under new capital rules, tying up one quarter of Citi's capital.

That is one reason why markets continue to send a message that Citi isn't acceptable in its current form. The stock has traded for more than a year at a steep discount to its tangible book value, sayingessentially that it would be better to break the bank up and sell off the pieces.

There is no sign that Mr. Corbat or Michael O'Neill, chairman of Citi's board, has any thought of going down that route, regardless of recent comments by former Citi chief Sanford Weill that big banks should be broken up. But to address the valuation gap, Mr. Corbat will need to turn Citi into a cleaner business.

And one option may involve doing the opposite of a breakup