Citi's earnings return to pre-crisis levels, but shareholders aren't satisfied

Citi has been unwieldy, impossible to manage and too big to fail for well over 30 years. Post-crisis, however, it has effected an impressive transformation.

The big picture: Its earnings, unjuiced by the excess leverage of the early 2000s, have largely regained their pre-crisis levels — an impressive enough achievement even before you realize that the bank has shrunk considerably over the past decade.

• Citigroup has 204,000 employees today, down from 374,000 in 2007, and it operates in fewer than half of the countries it did pre-crisis. A bank that once wanted to dominate the planet, Citi is now trying to make a virtue out of the fact that it has many fewer branches than its rivals.

The bottom line: Given Citi's status as an accident-prone and highly regulated central part of America's financial plumbing, the bank's first job is to be safe and boring. Citi's profitability is high enough that it should comfortably be able to weather a downturn, but not quite so high as to be a warning signal that the bank is taking on too much risk.

• To see how well CEO Michael Corbat has done his job, just compare Citi with Deutsche Bank. The two have a lot in common, but Deutsche is a basket case, while Citi gets stronger every quarter.

The bank's shareholders are restive, however. The FT's Robert Armstrong came out with a 2,000-word "big read" this week devoted to the proposition that Citi is underperforming and needs a "strategic shift."

• What they're saying: "Slow-and-steady improvement is not enough," writes Armstrong, channeling a growing consensus. "Mr Corbat and Citi’s board need to be bolder."

Be worried: The last time we saw headlines like this was in 2007, when Fortune described Citi's artificially inflated prior-year earnings as "less than stellar" at $21.5 billion, and when CEO Chuck Prince desperately told the FT that "when the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance."

Our thought bubble: Citigroup's profits are already huge, at roughly $2 billion per month. Shareholders want the bank to try to boost them further. The rest of us, not so much.