After five quarters in the red, Citigroup Inc. is finally daring to say the word "profit."

In an internal memo Tuesday, the New York banking giant's chief executive, Vikram Pandit, told employees that, thanks to strong operating results, the embattled company is having its best quarter since 2007, the last time it had profit. While still a partial picture (Pandit excluded provisions and markdowns from his calculation), it was a rare bright spot for a company that has had an outsize effect on sentiment toward the industry.

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