(Reuters) - Citigroup Inc (>> Citigroup Inc) Chief Executive Michael Corbat asked investors for more patience on Wednesday in explaining how the bank failed to meet four-year-old performance targets, even as vibrant markets drove profits higher in the fourth quarter.

Corbat adjusted those goals and proposed new times and conditions to reach them in a conference call with investors.

Progress has not been "as fast as we would like to go. The environment is not as good as we would like to have it," Corbat said, noting that the bank has had to contend with new regulations.

"We've executed against each (of the original targets) in this environment in a disciplined and committed way, and that's what we are going to continue to do," he said.

Corbat set the original targets in March 2013, shortly after taking the helm of Citigroup. The bank would meet thresholds for return on equity, operating efficiency and return on assets starting in 2015, he promised. But Citigroup met only one of the three targets that year, and none of them in 2016.

On Wednesday, Corbat said Citigroup is capable of hitting the targets, but asked for leeway – including temporarily using a lower measure of equity because regulators have required Citigroup to hold more capital than expected.

Corbat also told analysts that return on assets was not as indicative of company performance as it was in the past because regulators now want banks to rely more on expensive debt financing as part of their drive to prevent future taxpayer bailouts.

Citigroup's shares, which had risen about 17 percent since the election, fell 1.7 percent to $57.39. The stock is still well below Citi's reported tangible book value of $64.57 per share.

TRADING GAINS DRIVE PROFITS

Donald Trump's surprise election victory in November and the Federal Reserve's interest rate hike the next month caused a surge in activity across bond markets, boosting profits across Wall Street.

Citigroup's net income rose 7 percent to $3.57 billion, or $1.14 per share, in the quarter ended Dec. 31, topping the average analyst estimate of $1.12 per share, according to Thomson Reuters I/B/E/S.

The bank's revenue from bond trading rose 36 percent, while equity trading revenue rose about 15 percent.

Citigroup's finance chief, John Gerspach, said the trading trend has carried into the new year.

Bank of America Corp (>> Bank of America Corp), JPMorgan Chase & Co (>> JPMorgan Chase & Co.), Goldman Sachs Group Inc (>> Goldman Sachs Group Inc) and Morgan Stanley (>> Morgan Stanley) also reported sharp increases in fixed-income trading revenue for the quarter.

Shares of U.S. banks staged a dramatic rally in the weeks after Trump's victory, as investors expect the industry to reap huge benefits from lighter regulation, lower taxes and higher growth under his presidency.

Citigroup's situation is unusual though, because it has a much bigger international presence than other big American banks. Even after exiting some less-profitable markets in recent years, about half of its business is abroad.

Gerspach said Citigroup was comfortable with its current footprint in Asia and Latin America. That includes its Citibanamex business in Mexico, which Citigroup has faced some investor pressure to sell due to the risk that Trump will hurt the economy there and its currency. The peso has lost 15 percent of its value against the U.S. dollar since the election.

Gerspach also said that Citigroup's longstanding network for international transactions could create a competitive advantage for the bank if there are more restrictions on trade put in place. The network has been the envy of other big U.S. banks.

(Reporting by David Henry in New York; Additional reporting by Sweta Singh in Bengaluru and Dan Freed in New York; Editing by Michael Erman and Nick Zieminski)

By David Henry