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Bank of America and Citigroup, giants that have come to symbolize the troubles plaguing the nation’s banking industry, announced Friday that they were once again turning handsome profits. Bank of America reported a $3.2 billion profit for the second quarter. Citigroup said it earned $4.3 billionduring the period.

But behind the figures was a sober reality: Those happy results were driven by billions of dollars in one-time gains — in the case of Bank of America, by a profit from the sale of a stake in a big Chinese bank and, in the case of Citigroup, by a bonanza from a new joint venture for its Smith Barney division. Without those one-offs, the banks, despite two taxpayer-financed bailout dollars apiece, would have lost billions.

Like Goldman Sachs and JPMorgan Chase, which stunned Wall Street earlier this week with robust earnings reports, Bank of America and Citigroup got big increases from their trading operations.Still, the results exceeded analysts’ expectations. Bank of America announced earnings of 33 cents a share, and Citigroup reported earnings of 49 cents a share. The results at Citigroup far outstripped the loss of 18 cents a share that analysts had predicted.
Still, analysts said before the report that Bank of America might need to buttress its capital further. The bank said that its global card business lost $1.6 billion in the second quarter due to “weakening economies in the U.S., Europe and Canada.” “I think they will need to build billions of dollars of loan loss reserves this quarter,” said Jeff Harte, a banking analyst at Sandler O’Neill before the report was released. “It’s going to cost them significantly.”

The bank’s chief executive, Kenneth D. Lewis, acknowledged in a statement that “difficult challenges lie ahead from continued weakness in the global economy.”

At Citigroup, the chief executive, Vikram S. Pandit, echoed that view. “Our most significant challenge now remains consumer credit,” Mr. Pandit said in a statement. “Losses in our consumer businesses have been growing for some time, but we see positive signs of moderation in those loss trends.”
Both executives are widely seen being under considerable pressure. Controversy continues to swirl over Mr. Lewis’s decision to buy Merrill Lynch last December, a move he has said he was urged to make at the behest of federal officials. Mr. Pandit, meantime, has worked to mend strained relationships with federal regulators.
Both banks are deeply entrenched in traditional services like consumer and commercial lending, and as unemployment and wage numbers continue to worsen and households fall behind on bills, loan and credit card losses are piling up. Small corporations are increasingly defaulting on loans as the business environment remains stagnant — as evidenced by the turmoil at the commercial lender CIT. The outlook is murkiest at Citigroup, long considered to be in the worst shape among the major banks.

Further bumps are at the end of the month, when Citigroup is expected to convert preferred shares to common stock, raising the government’s stake in the bank to 34 percent. Existing shareholders will be heavily diluted.
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