Citi CEO Corbat: 'Not Afraid' to Make Additional Cuts

While a massive restructuring effort to lay off 11,000 and cut billions from the budget is already underway, Citigroup CEO Michael Corbat sounded a clear message to investors and analysts on Tuesday: I could wield the axe further if necessary.

Delivering the keynote presentation at Citigroup's financial services conference in New York, Corbat outlined a clear and simple set of benchmarks for investors to use in evaluating the company—those include efficiency targets and expected returns on assets.

In outlining the targets, Corbat said he is a "strong believer that you are what you measure."

In search of efficiencies beyond the $1 billion in annual cost cuts announced in December, Corbat said the bank identified 21 markets which could be scaled back or exited if there isn't a "clear path to returns". Those markets currently make up roughly 10 percent of the bank's revenue.

(Read More: Citigroup Axes 11,000 Jobs, $1.1 Billion in Costs)

Other units are already in the wind-down process, including roughly 60 percent of the company's credit card products, which Corbat said will be eliminated.

Perhaps the biggest overhang on returns, however, is the firm's "bad bank," Citi Holdings, a repository for all the bank's toxic assets leftover from the financial crisis. The unit represents only eight percent of the company's assets, yet sucks up a third of the company's capital—since regulators require the bank to keep more capital on hand for higher-risk assets.

A sign is displayed outside Citigroup Center in New York.
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A sign is displayed outside Citigroup Center in New York.

"We're fighting with one hand behind our back," Corbat said of the capital drag. If it were freed up that capital could likely be returned to shareholders or redeployed into other Citi business lines.

(Read More: Inside Citigroup's Strategy to Become Global Consumer Bank)

Citi, like other large banks, is currently awaiting a verdict from the Federal Reserve over whether it can return more capital. Last year, regulators struck down Citi's overzealous requests, an embarrassment for the bank and then-chief Vikram Pandit.

Analysts at KBW expect the bank to return virtually nothing to shareholders via dividends and buybacks. Corbat said this year, there's "no room for error.

(Read More: Dow Record, How We Got Here, Where We're Going)

Investors, though, were encouraged by Corbat's remarks: Citi shares spiked 2.5 percent in mid-day trading.

By CNBC's Kayla Tausche; Follow her on Twitter: @KaylaTausche
—By CNBC's Jesse Bergman; Follow him on Twitter: @JBergmanCNBC