Standard & Poor's and Moody's Investors Service have put US banking giant Citi’s ratings on review for a possible downgrade after the bank agreed to buy Wachovia Corp's banking operations. Another credit rating firm, Fitch, said it may follow suit, media reports said.

Moody's rates Citi's senior debt at “Aa3,” while S&P rates Citi's counterparty credit at “AA-". Both ratings are fourth-highest investment grade in the agencies' different scales.

S&P said that taking over Wachovia may be a distraction for management at a time when it is struggling with a difficult operating environment. But overall, it does not materially add to Citi's risk because it is structured as the takeover of a "clean" bank, S&P analyst Tanya Azarchs was quoted by Reuters as saying.

However, "on a stand-alone basis, Citi's own market-disrupted assets and mortgage loan exposures pose significant risk," said Ms Azarchs.

Citi has already booked about $34 billion worth of write-downs related to the housing sector downturn.