Citigroup Inc. reported surprised earnings on Friday thanks to the sale of its Smith Barney unit to Morgan Stanley.

Citigroup, the fourth big US bank to report strong results for the quarter, earned US$3 billion, or 49 cents per share, after paying preferred dividends.

The New York-based bank, which has received US$45 billion from the government, lost US$2.59 billion, or 55 cents per share, during the same quarter last year.

Citi's profit was driven by the sale of a majority stake in its Smith Barney brokerage unit to Morgan Stanley.

Meanwhile, the bank is facing mounting loan losses as the recession continues. According to the quarterly report, Citi has set aside US$12.68 billion to cover loan losses during the second quarter, compared with US$7.1 billion  in the same period last year.

(Xinhua News Agency July 18, 2009)