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Click the chart to track Citigroup's stock. By Hibah Yousuf, staff reporterOctober 18, 2010: 9:21 AM ET NEW YORK (CNNMoney.com) -- Citigroup posted second-quarter earnings of $2.2 billion Monday, marking its third straight quarterly profit and beating Wall Street expectations, as the bank continued to trim its loan loss reserves thanks to improving credit trends.
Earnings for the banking giant came in at 7 cents per share, compared to a loss of 27 cents per share during the period a year ago.
Last month, Citigroup (C, Fortune 500) said Discover Financial Services (DFS, Fortune 500) was buying the troubled Student Loan Corporation business, in which Citi owns a big stake. Excluding charges from that sale, the New York-based bank earned $2.6 billion, or 8 cents per share.
Analysts polled by Thomson Reuters expected the company to earn 6 cents for the quarter.
The provision for credit losses, the funds set aside for the allowance of bad loans, was reduced to $5.9 billion, the lowest since the second quarter of 2007, prior to the onset of the financial crisis. That's a decrease of 11% from the previous quarter and nearly 35% from a year ago.
The bank also continued to scale down its Citi Holdings division, which was created to house the firm's so-called "troubled assets," including its student loan business.
Citi Holdings cut its assets by $44 billion, or 9% from the prior quarter, and those assets now represent just 21% of Citigroup's total.
Meanwhile, Citicorp, which includes the bank's consumer and investment banking business, boosted its profit by 43% from a year ago to $3.5 billion.
Investment banking revenue fell in the quarter, but a 7% spike in Citicorp Latin America revenue and a 1% uptick in Asia offset declines elsewhere and helped boost Citicorp's sales by 7% compared to a year ago.
Citigroup has been focusing on restructuring the company into a smaller, more internationally-focused banking institution, and continues to be making progress in that direction.
"Our unique footprint and strong presence in emerging markets have us well aligned for growth trends we see globally, and we continue to make investments in our franchise so we can serve our clients at the highest level all over the world," said Citigroup CEO Vikram Pandit in a statement.
Citi is the second big bank in the past week to report better-than expected results. JPMorgan Chase (JPM, Fortune 500), which raked in $4.4 billion last quarter, reported last week.
The rest of the banking sector is slated to deliver results this week, including Bank of America (BAC, Fortune 500), Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500), and Wells Fargo (WFC, Fortune 500).
Shares of Citi were up about 2% in pre-market trading. But all big bank stocks have been hit hard on the past week due to concerns about the foreclosure scandal. 
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