The quarterly results, Corbat added, don't "yet reflect either the amount or caliber of earnings our shareholders expect and that our franchise is capable of. It will take some time to work through the challenges of the current environment to realize the potential."
Corbat took over after Vikram Pandit abruptly resigned in October in a shake-up attributed to a long-simmering dispute with the bank's board. Last month, Corbat announced more than 11,000 layoffs worldwide as part of a broader restructuring that included closing some offices in emerging markets.
Still, Citi showed some positive signs: Profits grew in trading, investment banking and consumer banking. The bank was able to pare losses in its lagging subsidiary Citi Holdings, a repository for much of the bank's troubled mortgage assets.
BofA and Citi were the only "too big to fail" banks that needed two rounds of bailout funds from the government. Each received $25 billion in late 2008 as the financial system crashed, and then each got $20 billion a few months later.
BofA repaid the $45 billion in December 2009. Citigroup repaid $20 billion that same month, and the government sold off its remaining $25 billion in Citi securities over the following year, eventually turning a $12-billion profit.
Bruce Thompson, BofA's chief financial officer, told analysts the recent settlements with Fannie Mae and regulators show the bank is making progress.
"We put a lot of risk behind us in 2012," he said.
Some analysts seemed impatient, however.
Mike Mayo, banking analyst at Credit Agricole Securities, grilled the executives about whether resolution was in sight for ongoing litigation with mortgage insurers, and whether a pending $8.5-billion settlement with mortgage investors might fall apart.
Thompson said the bank had set aside a "pretty sizable amount" in reserve to cover its liabilities to the insurers and expected a judge to rule on the Countrywide mortgage-bond investors in the second or third quarter.
"We're comfortable with our legal positions across the board," Thompson said.
Asked how he would measure success five years into his new job at Citi's helm, Corbat said: "We've got to get to a point where we stop destroying our shareholders' capital."