By Stephen Gandel
October 31, 2012

FORTUNE — Citigroup should dump its junk.

That’s the advice of Goldman Sachs analyst Richard Ramsden for Citi CEO Michael Corbat, who took over the job two weeks ago. Ramsden says that delinquent home loans and other bad assets left over from the financial crisis have proven to be 10 times more toxic to Citi than to its rivals. His advice: Sell now.

The Goldman analyst suggests Citi (C) dump $80 billion in assets by the end of next year. That’s about double the pace Citi’s ex-CEO Vikram Pandit was on. Most of it is the junk left over from the financial crisis, bad loans and businesses like subprime lending and collecting mortgage payments that Citi wants out of.

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But Ramsden also suggests that Citi might want to think about ditching bank branches as well. “[Citi’s] U.S. consumer bank is less efficient than peers despite a superior branch footprint,” wrote Ramsden in a recent report.

The question for Corbat is how to get rid of the bank’s junk. He could spin it if off in one big pile. But Ramsden says that probably would require Citi to extend a big loan to the newly separate company, or for the bank to guarantee some of the assets, in order to make the new company solvent and attractive to investors. So that might not really get Citi off the hook. A better solution might be for Corbat to sell Citi’s unwanted assets individually for whatever price he can get.

That was a strategy Pandit was reluctant to pursue, not wanting to cut prices and take losses. Indeed, part of the reason Pandit finally got booted was because its brokerage division ended up fetching much less than the bank thought. So Corbat might want to watch himself.

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But the earnings drag of holding onto the unwanted stuff might be outweighing the cost of dumping it. In the most recent quarter, Citi’s return on equity, a key measure of bank profitability, was just over 8%. That compares to 13% for rival JPMorgan Chase (JPM) and 17% for Wells Fargo (WFC). Without the junky assets, Ramsden figures Citi’s ROE would nearly double to 14%.

And Corbat might have an easier time selling now. A number of hedge funds have booked double-digit gains this year buying up subprime mortgage loans. The recent sale of the former subprime mortgage loan division of General Motors sparked a bidding war.

What’s more, Citi’s stock fell 90% under Pandit’s watch. So Corbat should probably think about taking a different approach than his predecessor.

Still, in resurrecting Citi and its stock, Corbat got thrown another obstacle this week. Three of Citi’s buildings, including two in its major complex in Tribeca, were damaged in Hurricane Sandy and the resultant flood in downtown Manhattan. One of the buildings, 111 Wall Street, might be inaccessible for months.

So much for Corbat’s CEO honeymoon.

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