Citigroup Trends Better

Citigroup(C),the largest U.S. financial company,has reported its Q2 results.The firm suffered a loss of 2.5 billion dollars,or .54 a share.For the past three quarters,Citi's losses have been shrinking.In recognition of this ,Deutsche Bank(DB) has upgraded Citi's stock.Its Q2 results were in line with most banks that have reported earnings,says Richard Bove of Ladenburg Thalmann.Its other sources of income are great enough to cover the losses in its loan portfolio.The banks as a group are lending plenty of money;their margins are not in distress;and they are gaining deposits.The industry is in much less trouble than people think.It has more equity,more reserves,more loans and more deposits,Mr.Bove indicated.Shares of Asian regional banks rose on Monday,their first chance to respond to Citigroup's news.On the other hand,there can still be setbacks for Citi and the other banks,investors should realize.The financial system has been shaken hard,so recovery will be a jagged process.