It’s official: Salomon Brothers has been completely picked apart.

Citigroup’s agreement to sell Phibro, its profitable but controversial commodity trading business, to Occidental Petroleum today puts the finishing touches on a slow erosion of a once-dominant bond trading and investment banking firm.

When Sandy Weill (pictured left) staged his 1998 coup – combining Citicorp and Travelers, Salomon Brothers was a strong albeit humbled investment banking and trading force. Yet little by little, a succession of financial crises, Wall Street fashion and regulatory intervention has whittled away at the once-dominant firm.

Not long after the Citigroup was formed, proprietary fixed income trading –  once the domain of John Meriwether, was shut down after the Asian debt crisis fueled losses that Weill could not stomach.

The Salomon name disappeared long ago as investment bankers and underwriters were rebranded Citigroup Global Markets.

Now Phibro, the former Philips Brothers that merged with Salomon in the early 1980s, is to be cast off because its energy traders made too much money when the rest of the bank suffered losses and required a $45 billion of taxpayer bailout.

Boutique investment bank Rothschild appears to be joining others such as Moelis and Greenhill in tapping investment banking talent that’s coming lose amid the financial crisis.

Rothschild, a more than two centuries old family-owned business, is planning to hire financial institutions and other investment bankers in the United States, a source briefed on the matter said. 

A Rothschild official wasn’t available for comment.

In October, the bank snapped up some FIG bankers in Europe, including from Lehman. Antonio Villalon, a Lehman vice chairman, was named as the co-head of its global financial institutions group.

The interest in the financial institutions sector is, of course, due to expectations of even more activity as things begin to look better in the economy. 

Moelis, which has already hired some 15 managing directors this year, is also looking for FIG bankers. Deutsche Bank and Greenhill have also already hired a bunch. 

Other active sectors have seen investment banks across the spectrum bulk up on talent as well, a recent - and remarkable — case being that of an exodus of healthcare bankers from UBS to Jefferies.