Citicorp Chairman John Reed says it's time for his bank, the largest in the U. S., to slim down and shape up. Reed announced on Jan. 22 that he wants to slash annual operating costs by $1.5 billion by 1993, up $700 million from his earlier target. Most of last year, Reed resisted calls for stern measures to address the bank's growing problem with commercial real estate loans. Nearly 19% of Citi's $ 13.3 billion in such loans were nonperforming at yearend.

In explaining the moves, Reed indicated that federal regulators may have urged him to bolster Citi's capital base. He wants to raise $4 billion to $5 billion through retained earnings, asset sales, and some new equity issue.

As for the future, Reed says he might be interested in merging with another bank. But he doesn't foresee any immediate deal.

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