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Citi Fortifies Its Foundation

These (among other metrics) will be key in helping Citi meet or exceed its earnings-per-share target, and will give investors a certain level of confidence about management's plans to create long-term value. As with Bank of America, which has had to overcome similar deficits and has installed new leadership, Citi needs to produce better fee-income growth.

If management can strengthen Citi's core banking operation by focusing on things like credit-cost reduction and growing its mortgage business, Citigroup could perform relatively well, if not become an immediate threat to JPMorgan and Wells Fargo in loan originations. This means that, despite underlying weaknesses, Citi can still produce above-average returns for investors -- even while the once-sluggish interest rate environment is suddenly beginning to improve.

[Read: The Best Car Deals and Why You Can't Get Them]

As Corbat continues to erase questions about Citi's long-term strategy, I believe too much fuss continues to be made over Citi's perceived adverse yield curve -- the metric that is used to predict the bank's economic output changes and growth potential. While these may be near-term concerns, I believe the bank's progress tips the long-term risk/reward scale more in the bank's favor.

So until there are meaningful signs of declining profitability or market share erosion, investors should remain optimistic. Given Corbat's careful attention to operating expenses controls, not to mention Citi's better-than-expected performance improvements in return on equity, I don't see anything standing in the way of this stock going higher.

At the time of publication, the author held no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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