Citigroup said net income for the three months ending in June came in at $4.8 billion, a 6.6% increase from the same period last year. Earnings per share were pegged at $1.95, but excluding unusual items such as the accounting gain, they were listed at $1.83 per share. On that basis, the results beat the $1.81 average estimate of Wall Street analysts in a survey by the data provider FactSet.
The $350 million gain was linked to an investment in Tradeweb Markets, which sold shares via an initial public offering in April. The stock has climbed 14% in the past three months.
"We navigated an uncertain environment successfully by executing our strategy, and by showing disciplined expense, credit and risk management," said CEO Michael Corbat.
Citigroup's return on assets, a gauge of profitability that roughly measures the difference between interest rates collected and deposit rates paid out, rose to 0.97 percentage point, from 0.94 percentage point a year earlier. But it was down from 0.98 percentage point in the first quarter of this year.
Loans and deposits increased, while revenue rose faster than expenses, Corbat added.
The stock price rose 0.3% in New York trading on Monday.
Citigroup was the first of the largest U.S. banks to post second-quarter results, with JPMorgan Chase (JPM) - Get Report , Bank of America (BAC) - Get Report and Goldman Sachs (GS) - Get Report preparing to publish later this week.
Wall Street analysts have warned that banks could face a squeeze on their lending profits as the Federal Reserve moves toward a likely interest-rate cut later in July. All the while, competition is heating up for deposits, with more online lenders trying to lure savers away from traditional accounts at bricks-and-mortar branches.
Revenue rose by 3% from a year earlier in Citigroup's consumer division, which includes credit cards as well as online and branch banking. Operating expenses were unchanged from the prior period, though costs related to bad loans rose by 6%.
"We have good momentum and solid growth across our consumer franchise, particularly in the U.S.," Corbat said.
But excluding the Tradeweb gain, revenue from trading bonds, commodities and currencies fell by 4% to $4.7 billion, "reflecting a challenging trading environment."
According to Wall Street analysts, the uncertainty spurred by President Donald Trump's trade war with China has led fewer clients to place big transactions with big U.S. banks in stock and bond markets.
Those predictions were evident in Citigroup's results, with wtock-trading revenue falling by 9% to $790 million, due to slower client activity in exchange-based transactions and hedge-fund financing, partially offset by strong demand for derivatives from corporate clients.
Corporate banking revenue, which includes fees from underwriting stocks and bonds and advising on mergers, slipped by 3% to $5.1 billion.