Citi CEO: Overhaul Positions Bank for New Trends

U.S. bank Citigroup is pulling its core businesses closer together within a "universal bank" to take advantage of changes in trade and capital, Chief Executive Vikram Pandit said on Tuesday.

"Our core businesses are squarely positioned against secular growth trends in trade, capital, payments and wealth creation," he said in a speech in London.

"Our five businesses are well positioned to capitalise on these trends...and we're bringing all these businesses closer together in a global universal banking model," he told senior industry figures at the British Bankers' Association.

Pandit, who took the helm at the largest U.S. bank in December, said the universal model remained "the most stable architecture" -- apparently dismissing speculation that Citi has become too unwieldy and is set to be broken up.

Citi last month announced radical plans to reduce $500 billion of non-core "legacy" assets to below $100 billion in two to three years.

Along with other Wall Street giants, Citi has been badly hit by the credit crunch and has recorded billions in writedowns and credit losses, but Pandit said the U.S. economy was now "shaping up and getting fit" for a more normalised environment.

"The summer will be an important time to watch. That's when the housing market is most active," he said. "Home sales will indicate whether we are on a short or long rebalancing path."

Speaking at the annual conference, Pandit also called for tighter oversight of substantially sized institutions whether they are banks or not -- indicating hedge funds and non-regulated firms should face closer scrutiny -- following the unprecedented opening of the Federal Reserve discount window to non-bank dealers.

"Systemically significant institutions need to be as transparent to regulators as regulated institutions are, because without that, agencies that are charged with safeguarding the world's financial systems simply won't have enough information to mitigate systemic risk," Pandit said.

"Once a company gets large enough to impact the financialsystem shouldn't it operate under the same systemic risk umbrella in terms of capital, liquidity and transparency?"