Citigroup Inc, the bank that took $45 billion in U.S. bailout funds during the financial crisis, is widely expected to report its fourth consecutive quarterly profit on Tuesday, signaling to investors that it has largely completed its recovery.
Analysts on average expect the third-largest U.S. bank by assets to post a profit of 8 cents per share for the fourth quarter of 2010, according to Thomson Reuters I/B/E/S.
That would compare with a year-ago loss of 33 cents per share.
Citigroup has largely recovered from the losses that drove it into the government's arms during the financial crisis and has shed most of the resulting government ownership.
The U.S. Treasury finished selling off its common share stake in Citigroup in December. The Treasury said on Friday it would unwind its final investment in the bank by auctioning off remaining warrants.
Shares of Citigroup closed at $5.13 on Friday -- their highest point since August 2009. The bank's shares have surged 55 percent since the beginning of 2010, and gained additional momentum last month after the U.S. government sold the last of its stake.
The bank's fourth-quarter profit is expected to lag that of larger rival JPMorgan Chase & Co, which beat analyst expectations on Friday and boosted investor sentiment about the outlook for the banking industry.
JPMorgan set the bar very high, said Michael Holland, who oversees $4 billion of assets as chairman of Holland & Co.
I think Citi is probably going to do very well but ... (Chief Executive) Vikram Pandit has a tall order to fill here when it comes to doing the same thing, he added.
Citigroup, like other banks, has seen its losses from bad loans shrink over 2010. But its revenues faltered in the face of weak loan demand and a slump in trading volumes over the second half of the year.
JPMorgan Chase said on Friday that it was starting to overcome both conditions, giving bank investors hope that other banks could start to see an increase in loan demand and trading profit this year.
(Reporting by Maria Aspan; Editing by Muralikumar Anantharaman)