Ahead of the Bell: Citigroup to report 2Q results

NEW YORK - Questions about the health of one of the nation's largest, and hardest hit, banks may be answered Friday as Citigroup Inc. reports its second-quarter results before the market opens.

In a period of intense upheaval, New York-based Citi is widely expected to post its seventh consecutive quarterly loss. Citi would have ended that string in the first quarter had it not been for paying out special preferred dividends.

Analysts polled by Thomson Reuters, on average, forecast Citi lost 37 cents per share during the quarter ended June 30.

Note only will investors be looking at Citi's second-quarter performance, they will also likely been focused on any updates on the bank's recovery efforts.

Among the largest recipients of government support, Citi is trying to remake itself to return to profitability and regain its position among elite banking giants like JPMorgan Chase & Co. and Goldman Sachs Group Inc.

Citi has received $45 billion in funds from the government and guarantees to protect against losses on more than $300 billion in risky assets. The government is also in the process of exchanging a portion of its $45 billion loan for a 34 percent stake in the bank as part of a larger debt-exchange program.

With the government support, Citi faces added government restrictions and regulations, such as caps on executive compensation. Both JPMorgan and Goldman Sachs have already repaid investments made by the government, freeing them from such restrictions and allowing them to become more aggressive in their businesses again.

Last fall, amid the worst of the credit crisis, hundreds of banks received funds from the government's $700 billion bank bailout program. Unable to rebound from mounting investment and loan losses, Citi has received multiple rounds of government support.

In an effort to repay the government and return to profitability, Citigroup split off its riskier business from its more traditional banking operations earlier this year and has been selling assets, such as Japanese trust bank NikkoCiti Trust.

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