Citicorp's board of directors has reopened an investigation into charges that Citibank officials made foreign exchange transactions in some of its overseas branches to hide profits from foreign tax authorities.

Darwin E. Smith, chairman of Kimberly-Clark Corp. and head of the audit committee of Citicorp's board, told shareholders today that the board decided on a new investigation after a stockholder filed suit against 15 Citibank officials last month. Harry Lewis charged in the suit that the officials had the bank engage in illegal foreign exchange transactions and had failed to disclose those transactions to stockholders.

Smith indicated, however, that he does not believe the new investigation will turn up dishonesty on the part of Citicorp officials. He said he has been a director of Citicorp for nine years, and "I personally would not work for any institution that had dishonest people running it. Within that framework, we will do a thorough and complete job of investigating the matter."

In December the Securities and Exchange Commission decided to take no action against Citicorp--the parent company of the nation's second-biggest bank. A three-year investigation by the SEC staff alleged that, between 1973 and 1980, the bank's top management directed operations designed to get around, and sometimes violate, tax laws in some foreign countries.

The SEC said the matter was a tax or a banking case, not a securities issue. It said the allegations surrounded practices that were "old" in any event. In 1980, the comptroller of the currency declined to take any action against Citibank.

A former Citibank official, David Edwards, made the initial public charge in 1978 after he said he could get neither Citibank managers nor its board of directors interested in his claim that the bank was making illegal transactions. Citicorp's board then directed its law firm, Shearman & Sterling, to study the charges. The firm reported that, for the most part, Citibank's foreign exchange procedures were proper.

The bank has said, however, that it made some changes in those procedures, and the bank has paid several fines to foreign countries.

Audit committee chairman Smith, at his own request, took the floor to tell shareholders that the board is "deep in the throes of an investigation" that will "last at least another two months."

He dismissed a shareholder's complaint that Shearman and Sterling is too close to Citicorp to do the kind of investigation needed. Smith said he received an opinion from another law firm that does no work for Citicorp, and it gave an "unqualified yes" to using Shearman and Sterling again.

In a related development, Citicorp Chairman Walter Wriston reported to shareholders that the bank's first-quarter profits before securities transactions were $199 million ($1.55 a share). "Both the dollar amount and the earnings per share are about double those of last year's depressed first quarter," Wriston said.

Wriston also confirmed reports that federal regulators have asked the giant bank holding company to make a bid to acquire Fidelity Financial Corp., the big California savings and loan association that was put into receivership earlier this month. "We're considering whether or not, and under what conditions, we might make a bid," Wriston said.