On the heels of the move by General Electric (NYSE: GE) Thursday to spin-off its consumer and industrial division, today we have news that Citigroup (NYSE: C) is selling its German retail banking business for $7.7 billion.

According to MarketWatch: "Citigroup said Friday that it's going to sell its German retail banking business to France's Credit Mutuel for 4.9 billion euros ($7.7 billion) in a deal that will strengthen its balance sheet and help it focus on faster-growing businesses."

This is a smart move for the company in order to clean up its balance sheet, but it's just a small step. If the company truly wanted to provide shareholder value, it could spin off the credit cards division, separate domestic and global consumer banking, spin off the capital markets division and so on. I admit that I haven't done all the work on this but my hunch is that if Citi would break up the company the combined parts would be valued significantly higher than where it is now trading.

While selling the division helps the balance sheet, unfortunately the impact for shareholders is muted. I would much rather see it follow the path of GE and give shareholders a share of this business and other businesses.

At least this sale is a start.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/11/08.