Wells to take up to 80 percent Wachovia deposits: source

NEW YORK (Reuters) - Wells Fargo & Co is likely to get about 75 percent to 80 percent of Wachovia Corp's deposits, while Citigroup is likely to get closer to 20 percent to 25 percent of the deposits, a person briefed on the matter said on Tuesday.

The situation is in flux, and the outcome is still unclear, the person cautioned, adding that Wells Fargo may end up with 100 percent of Wachovia's deposits, and Citigroup with none.

Wells Fargo and Citigroup are locked in an intense battle for Wachovia, the sixth-largest U.S. bank that has been hobbled by the mortgage crisis but has a valuable network of branches. Citigroup said on September 29 that it preliminarily agreed to buy Wachovia's banking assets for about $2.2 billion with partial government guarantees.

On Friday, Wells Fargo said it had signed an agreement to buy the whole of Wachovia, including its retail brokerage and asset management business, in an all-stock deal worth about $15 billion at the time.

Lawyers for the two banks wrangled over which bank's agreement trumped the other's. The Federal Reserve has worked with both banks to try to broker a compromise.

But at this point, it appears Wells Fargo would take Wachovia's branches and deposits in the U.S. Southeast and on the West Coast, while Citigroup would take branches and deposits in the Northeast, the person briefed in the matter said.

Wells Fargo would likely take most of Wachovia's assets, including problem assets such as option-pay mortgages, the person said.

Wachovia and Citigroup declined to comment, while Wells Fargo was not available for comment.