Citigroup loss is smaller than expected

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Though the second-quarter loss totalled $2.5 billion, Citigroup's results soothed investors, who pushed shares of the largest U.S. bank by assets up $1.56, or 8.7 percent, to $19.53 in Friday morning trading on the New York Stock Exchange.

Citigroup shares, part of the Dow Jones industrial average, had bottomed Tuesday at $14.01, the lowest since the bank was created in a 1998 merger.

Investors have long sought signs the New York-based bank, one of the hardest hit in the year-long global credit crisis, may finally be ready to turn a corner.

"Concerns of an imminent capital shortfall have abated," wrote Mike Mayo, a Deutsche Bank Securities Inc analyst. He upgraded Citigroup to "hold" from "sell" but expressed concern about future write-downs and "still negative" credit trends.

Citigroup's net loss totalled 54 cents per share, and was the bank's third straight quarterly loss. It compared with a year-earlier profit of $6.23 billion, or $1.24 per share.

The operating loss was $2.22 billion, or 49 cents per share, as revenue declined 29 percent to $18.65 billion. On that basis, analysts on average expected a loss of 67 cents per share on revenue of $17.44 billion, Reuters Estimates said.

Citigroup's report followed surprisingly strong profits this week from JPMorgan Chase and Wells Fargo, and a much larger-than-expected $4.9 billion quarterly loss on Thursday at Merrill Lynch.

Other major lenders report quarterly results next week. Analysts expect Bank of America Corp on Monday to say profit fell by more than half, and for Wachovia Corp and Washington Mutual Inc on Tuesday to post big losses.

NOT HAPPILY EVER EVER

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