Citigroup lost $2.5 billion, or 54 cents per share, in the second quarter, compared with earnings of $6.23 billion, or $1.24 per share, in the year-ago period.
Steep as the loss was, however, it could have been worse: analysts surveyed by Thomson Reuters had expected the New York-based bank to lose 67 cents per share.
The loss was caused by $7.2 billion in write-downs of Citigroup's investments in mortgages, as well as other loans, and $745 million in asset revaluation costs in its consumer lending business.
Revenue in Citigroup's wealth management division, which includes Smith Barney, increased 4% to $3.32 billion.
Citigroup's corporate and investment banking business fell 71% to $2.94 billion, due to the write-downs.
Meanwhile, Merrill Lynch lost $4.65 billion, or $4.97 per share, compared with earnings of $2.1 billion, or $2.24 per share, in the year-ago period.
The loss was more than double the $1.91-per-share estimate analysts surveyed by Thomson Reuters had expected.
Merrill took $9.4 billion in write-downs in the quarter, bringing the firm’s write-downs to about $40 billion since the third quarter of its last fiscal year.
Revenue in Merrill's global wealth management business was $3.4 billion, a 5% decline from the year-ago quarter.
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