Citi Eyes Regional Bank Deal as Fraser Turns to Next Chapter (2)

Citigroup Inc.’s top executives are weighing buying another bank, a move long considered inconceivable, as the firm wraps up years of work to address regulators’ criticisms.

Senior leaders of the New York-based firm have held preliminary discussions in recent months about trying to acquire a major US regional lender to dramatically ramp up deposits — a move that could provide more fuel for the Wall Street bank’s lending and trading operations, according to people familiar with the matter.

Some executives broached the possibility of a takeover during a meeting with US regulators this year, said the people, asking not ...