ITT Corp. Sells Remaining Assets of Finance Unit for $5.5 Billion : Restructuring: No decision has been made on fate of 40 employees of ITT Federal Bank’s branches in Orange County.

ITT Corp. said Friday that it has sold the remaining assets of its finance subsidiary, including the large ITT Federal Bank in Irvine, to a series of buyers for a combined $5.5 billion.

The nation’s 23rd-largest company said the sale of ITT Financial Corp. in St. Louis and a string of its units completes ITT’s restructuring efforts, giving it total cash proceeds of $13 billion. ITT did not disclose the buyers.

With the sale, the New York conglomerate has severed all remaining ties to its consumer finance and residential lending businesses. The move is part of a long-term strategy that began when Rand V. Araskog took over as chief executive in 1979. He has dismantled much of the far-flung operations built and made famous by his predecessor, Harold Geneen.

Araskog once envisioned the former International Telephone & Telegraph as a technology powerhouse, but most of its telecommunications equipment business was sold in the mid-1980s. He also thought about splitting the company into pieces to boost its stock price.

Now the 63-year-old Araskog is reshaping ITT again by selling unwanted operations to turn it into a major player in the gambling, hotel and entertainment business. It added Caesars World to its Las Vegas holdings and operates the Sheraton hotel chain. It also plans to keep its ties to insurance and auto parts manufacturing businesses.

ITT Financial, parts of which were sold

earlier this year, wasn’t part of the company’s future. ITT Federal Bank, a savings and loan that had grown to $4.3 billion in loans and other assets by the end of December, is being sold to First Nationwide Bank, the country’s sixth-largest thrift, federal regulators said. The purchase price was not disclosed.

With only three branches in Irvine and Newport Beach, ITT Federal had used money borrowed mainly from its parent company to fund home loans and build itself into the nation’s 35th-largest thrift.

Its acquisition gives First Nationwide a solid presence in central Orange County, where it had been noticeably absent for such a large S&L.; First Nationwide, a San Francisco thrift before it was sold last October to investors outside Dallas, has only three Orange County branches--in Garden Grove, Buena Park and La Palma.

First Nationwide is expected to keep the three ITT Federal branches open, but no decision has been made yet on the fate of about 40 ITT Federal employees, executives said. One executive said First Nationwide won’t even interview ITT Federal’s employees until after federal regulators approve the transaction. There was no indication of when that approval would be coming.

The future of ITT Federal, which opened in Newport Beach in 1979 as Newport Balboa Savings Bank, had been uncertain since 1993, when its founding president, Fredric J. Forster, left to become president of Home Savings of America and ITT began its restructuring with the sale of its consumer finance divisions.

Those divisions were not part of the thrift, but ITT Federal’s management was altered. Executives at its immediate parent company, ITT Residential Capital Corp. in San Francisco, took over as the thrift’s top managers, and some real estate operations were moved to ITT Residential offices in La Jolla.

ITT Residential was one of three parts of ITT Financial that were sold. The other two were Lyndon Insurance Group’s financial reinsurance business and the ITT financial operations, which also included real estate loans and properties in Southern California.

Also Friday, ITT denied a newspaper report that it had joined with Hollywood mogul Barry Diller in a planned $5-billion bid to buy CBS Inc. ITT termed the report “absolutely fictional” and “a complete fabrication.” One Wall Street analyst said ITT was so vehement in its denial that it called a number of analysts to say the story wasn’t true.

ITT shares fell $1 to $109 in New York Stock Exchange trading Friday.