Citigroup Inc. (C), the third-biggest U.S. bank by assets, posted a 42 percent increase in second-quarter profit that beat analysts' estimates as stock-trading revenue surged and losses on unwanted assets declined.
Net income climbed to $4.18 billion, or $1.34 a share, from $2.95 billion, or 95 cents, a year earlier, the New York-based bank said today in a statement. Excluding an accounting adjustment, earnings were $1.25 a share, beating the $1.18 average estimate of 27 analysts surveyed by Bloomberg News.
Chief Executive Officer Michael Corbat, 53, has fired thousands of workers and scaled back operations in some countries to cut costs since replacing Vikram Pandit, 56, in October. Citi Holdings, the unit created in 2009 as a home for the company's unwanted assets after the financial crisis, posted its smallest loss ever.
"Citi has done a good job of de-risking its business by pulling out and cleaning up the Citi Holdings assets," said Marty Mosby, an analyst with Guggenheim Securities LLC. "The critical element for long-term value creation is still a continued lessening of the drag from Citi Holdings."
Citigroup posted a $274 million loss in the second quarter of 2012 from the sale of some of its stake in Akbank TAS (AKBNK), a Turkish bank, benefiting this year's profit comparison.
Shares of the company climbed 28 percent this year through July 12, to $50.81, the best performance among the top three U.S. banks.