(Bloomberg) -- Citigroup, the U.S. bank that cut unwanted assets 25% last year, should no longer be expected to offer clients unlimited financial services, Chief Executive Officer Michael Corbat said.
People shouldnt want us to be everything to everyone, the 53-year-old said in an interview with Bloomberg Television at the World Economic Forum in Davos, Switzerland. Weve gone through a pretty significant transformation. Weve got the right business mix.
Global banks are selling assets, firing staff and exiting some markets to lift profit and capital levels to meet stricter regulatory requirements and boost shareholder returns. Corbat is trimming spending after taking over from former CEO Vikram Pandit, who expanded New York-based Citigroups operations in emerging markets before directors ousted him in 2012.
Corbat said Citigroup will continue cutting costs. Investors saw the benefits of exiting five consumer businesses and overhauling other units last year, he said.
The size of Citi Holdings, the business that houses unwanted and loss-making assets, fell to $117 billion in the fourth quarter from $156 billion a year earlier, Citigroup said in a presentation on its website last week. Corbat ran the unit, which mainly consists of U.S. mortgages, until the end of 2011.
The worlds becoming a better place and again it is up to us to make sure were doing the right things, Corbat said. Weve got the resources: weve built capital, we have liquidity.
GROWTH CAUTION
Citigroup reported fourth-quarter earnings that missed Wall Street estimates last week as bond trading slumped. Its shares have dropped 5.6% since Jan. 16, when the company said net income more than doubled from a year ago to $2.69 billion.
Corbat said he expects the U.S. economy to grow between 2.6% and 2.7% this year. Thats less than the 2.8% median estimate of 83 economists compiled by Bloomberg.
The global economy will probably expand about 3.25% in 2014 with emerging markets growing an average 5%, he said. The International Monetary Fund raised its global growth estimate to 3.7% in a report two days ago.
Corbat was CEO for Europe, the Middle East and Africa before replacing Pandit. Hes been at the company and its predecessors since leaving Harvard University with a degree in economics 31 years ago
The economic expansion will help alleviate the pain of the Federal Reserve reducing its bond purchases, though transitions to higher interest rates are never smooth, Corbat said.
As a world we go into this one probably a bit better than we have historically, he said. If youre extracting that excess liquidity as the rest of the economy, that powerful engine, is coming behind it, it should create for a better transition.
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