UPDATE: Citigroup Posts Upbeat Q2 Results; Shares Rise

Shares of Citigroup (NYSE: C) surged around 3.5% in pre-market trading after the bank reported better-than-expected second-quarter results. The bank also announced its plans to pay $7 billion to settle the ongoing investigation of the Residential Mortgage-Backed Securities Working Group.Citigroup's quarterly net profit fell to $181 million, or $0.03 per share, versus a year-ago profit of $4.18 billion, or $1.34 per share. Its adjusted net profit came in at $3.9 billion, or $1.24 per share. Its revenue slipped 6% to $19.3 billion from $20.48 billion. Excluding CVA/DVA, revenue fell 3% to $19.4 billion. However, analysts were estimating earnings of $1.06 per share on revenue of $18.92 billion. The bank's revenue from fixed-income trading business declined 12%, while investment banking revenue rose 16% to $1.34 billion. Citicorp revenue fell 8% to $17.9 billion, while Global Consumer Banking revenue slipped 3% to $9.4 billion. Citi Holdings revenue surged 33% to $1.5 billion.Operating expenses increased to $15.5 billion from $12.1 billion. The bank's allowance for loan losses was $17.9 billion at quarter end, versus $21.6 billion at the end of the previous year period.Michael Corbat, Chief Executive Officer of Citi, said, “Our businesses showed resilience in the face of an uneven economic environment. During the quarter, we continued to grow loans in our core businesses, reduce operating expenses by simplifying our products and processes and utilize our deferred tax assets.”Citigroup shares gained 3.51% to $48.65 in pre-market trading.