Citi posts highest profit since crisis

Citigroup Inc, the third biggest US bank by assets, reported its highest quarterly profit since the financial crisis as Chief Executive Michael Corbat's restructuring and cost-cutting efforts paid off and the bank's legal expenses plunged.

Under Corbat, who replaced Vikram Pandit as CEO in 2012, Citi has been selling retail operations in several countries, shrinking its US branch network and disposing of non-core businesses.

The bank's shares rose three per cent to a six-and-a-half-year high of $58.18 on Thursday after its adjusted earnings handily beat analysts' estimates.

Operating expenses in Citicorp, which holds the bank's core businesses, fell 6 per cent to $9.8 billion in the second quarter.

Citi shrank the assets of Citi Holdings, which houses businesses it plans to sell, by 22 percent compared with 19 percent in the first quarter. The unit posted earnings of $157 million.

"Through active expense and balance sheet discipline, we are on track to reach our financial targets for the year," Corbat said in a statement.