Vikram Pandit didn’t fool anyone by saying Citigroup had a great year.

Citi’s (GS) stock tumbled 6% Tuesday after the bank’s weak fourth-quarter earnings report sent investors fleeing the financial sector.

Pandit & Co. picked a bad time to post a soft quarter, because there was little other major financial news Tuesday — which helps to explain the huge volume in Citi shares.  

Trading in Citi had reached 1.3 billion shares by 1:30 p.m. EDT, which is more than double the average daily volume over the past three months of 549 million shares.

Of course, Citi stock is apt to trade heavily because there are so many shares out there. The bank had nearly 30 billion shares outstanding at year-end, which is seven times as many as JPMorgan Chase (JPM), thanks in part to shares Citi issued in its 2008-2009 bailout.

And heavy volume is nothing new for Citi. The stock traded a billion times on Friday, and set the single-day volume record last month with 3.3 billion trades last month, when Treasury sold the last of its bailout stock. Citi cleared a billion shares a day 19 times during the third quarter of 2009 (see chart, right), when traders caught onto the idea that Citi was going to survive the financial meltdown.

Also skewing those numbers is the low cost of a single Citi share, recently $4.82. At that clip buying the entire day’s trading volume in Citi would cost just over $6 billion.

Apple (AAPL), the tech favorite whose shares are being hit by news of the health-related absence of CEO Steve Jobs, has traded just a fraction of Citi’s volume, 45 million shares at 1:30. But because Apple stock costs $343, buying the entire lot that changed hands today would cost more than $15 billion.

Pandit’s bad news surely isn’t the only factor driving Citi trading. Joe Saluzzi of broker Themis Trading points to so-called rebate traders, those who buy or sell shares in volume using electronic communication networks such as, to name one, BATS Trading of Kansas City.

Update Jan. 19: I should note that Saluzzi didn’t single out Bats or any other firm — he is, as he is wont to do, taking a swing at what he takes to be the broken structure of U.S. equity markets. To take a step further, a Bats spokesman points out that the firm is now known as Bats Exchange and is the third largest stock exchange globally (ECNs don’t list stocks, for what that’s worth). He adds that other exchanges, including ones everyone has heard of such as NYSE and Nasdaq, do very much the same thing.

In any case, the exchanges profit in part by boosting volume on their platforms and do so in part by offering traders a rebate on some stock trades. These rebates, typically $2.50 or so per thousand shares traded, encourage traders to buy and sell highly liquid, heavily traded stocks at the same price simply for the sake of raking in the rebate cash.

This is not, Saluzzi says, the sign of a market that is doing its all to help jobs-creating businesses.

“1 out of every 4 shares traded today” is in Citigroup, he said in a Twitter post. “Now that’s a well balanced mkt.”