New York - The ailing US bank Wachovia is set to be divided between banking rivals Citigroup and Wells Fargo, according to US media reports on the ongoing takeover battle over the United States' fourth-largest bank on Wednesday.

Wells Fargo would receive the bulk of Wachovia's branches and deposits, while a smaller share would go to Citigroup, which is currently looking for possible partners outside the banking sector, the Wall Street Journal reported.

With the takeover of Wachovia, both rivals hope to become top players in the US private banking business.

Citigroup had announced a 2.2-billion-dollar deal to take over large parts of Wachovia on September 29, but was then stumped as Wells Fargo and Wachovia announced they had agreed on a higher offer of 15 billion dollars in a stock-for-stock exchange.

The Wall Street Journal reported Citigroup continued to be against purchasing the entire Wachovia bank.

The US Federal Reserve is pressing for a swift solution in the takeover battle, fearing massive problems for Wachovia which is already suffering from the fallout of the global financial crisis.

However, with talks stalling, insiders were increasingly afraid that the tug-of-war over the bank would not be resolved quickly, the paper reported.

On Tuesday, the rivals at least agreed to halt mutual lawsuits by a day.

In the wake of Wells Fargo's and Wachovia's announcement, Citigroup had filed a lawsuit against the two for 60 billion dollars in punitive and compensatory damages.

According to a Financial Times report, Citigroup head Vikram Pandit had commented on the deal in a staff meeting: "We saved Wachovia from collapsing. We have to be compensated for that."

Following a division of Wachovia, Wells Fargo could receive about three quarters of the bank's business in California and in the south- east of the United States, while Citigroup would receive the rest in the north-east, it was reported.

Headquartered in San Francisco, Wells Fargo is among the leading private banking business of the US, and especially strong on the West Coast. (dpa)