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Citi Q2 Profits Up on One-Time Gain

NEW YORK CITY-The financial services giant is one of two major banks that has yet to repay its TARP money to Treasury.

By Paul Bubny | Updated on July 19, 2009

NEW YORK CITY-Citigroup on Friday reported second-quarter net income of $4.3 billion, compared to a $2.2-billion loss during the same quarter in 2008. Much of the boost came from a one-time, after-tax gain of $6.7 billion on the sale of Smith Barney, which closed on June 1, but also reflected a strong showing from the institutional clients business.

“We remain optimistic that our turnaround of Citi will gain speed,” Citigroup CEO Vikram Pandit says in a release. “Our institutional business has a strong client franchise. Our most significant challenge now remains consumer credit. Losses in our consumer businesses have been growing for some time, but we see some positive signs of moderation in those loss trends. Sustainable profitability remains our primary goal.”

Friday’s earnings report was the first to reflect Citigroup’s split into two segments, Citicorp and Citi Holdings, which was announced in January. Citicorp, which includes Citigroup’s core holdings, generated $15 billion in revenues during Q2, down 11% year over year. Quarterly revenues for Citi Holdings, which is comprised primarily of non-core businesses that are candidates for eventual disposition, reached $15.8 billion, largely on the Smith Barney sale.

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