Citigroup's net profit up 24 per cent on higher investment banking fees

NEW YORK: Citigroup, the third-biggest US bank, said profit rose 24%, beating analysts' estimates on higher investment- banking fees and fewer losses tied to troubled assets.

Second-quarter net income was $3.34 billion compared with $2.7 billion in the same period last year, New York-based Citigroup said on Friday in a statement.

A 61% gain in investment-banking revenue at Citigroup, led by chief executive officer Vikram Pandit, 54, mirrored the results JPMorgan Chase & Co reported on Thursday. Losses fell at Citi Holdings, the unit that includes distressed assets Pandit wants to sell.

The results countered a decline in trading revenue from the first quarter and allowed Pandit to post a sixth straight profitable quarter.

"The momentum has shifted away from losses and to small incremental gains," said Michael Yoshikami, CEO and founder of YCMNet Advisors, which manages $1.1 billion including Citigroup shares.

"This is the beginning of laying a foundation for the long-term for Citigroup to actually be a profitable company again on a consistent basis," Yoshikami said before results were released.

JPMorgan, the second-largest US bank by assets behind Bank of America, on Thursday reported a $5.43 billion profit. The firm's investment bank, led by James Staley, increased revenue 37% to $1.9 billion.

Bank of America may report a profit of $3.08 billion, excluding mortgage- related costs on July 19, the Bloomberg survey shows. Wells Fargo & Co, the largest mortgage lender, may say it earned $3.75 billion when it announces results the same day.

Citigroup's investment-banking unit advised on completed deals worth $98.8 billion in the quarter, almost quadruple volume for the same period last year.

Overall deal volume increased 45% to $579.3 billion, according to data compiled by Bloomberg. Citigroup also rose to fourth from eighth among global corporate bond underwriters.