The stock closed down 26 cents (6.25%) at $3.90.
From The Street.com:
Citigroup Inc. said Friday it earned $2.7 billion during the second quarter.
The big bank's profits rose because fewer people were falling behind in their loan payments during the April-June period. It was the fourth straight quarter that Citigroup's loan losses dipped, which allowed it to release some money from reserves it had been holding for future losses.
The bank's losses from failed loans fell 31 percent to $7.96 billion during the second quarter from $11.47 billion a year ago. That allowed Citi to remove $1.51 billion from its loss reserves. Last year during the same quarter, the New York bank added $4 billion to those reserves.
During a conference call with analysts, Citigroup's chief financial officer, John Gerspach, discussed improving credit quality and the likelihood that it will continue in the coming quarters. Here's what he had to say:
"Credit costs will remain a key driver of our earnings performance for the rest of the year. Assuming the U.S. economy continues to recover and the international recovery is sustained, consumer credit costs should continue to decline.
"Internationally, we expect credit will continue to improve, but at a moderating pace. In both North America cards portfolios we expect (net credit losses) to improve modestly but will likely remain elevated until employment levels improve significantly....MORE