NEW YORK, July 17 (Xinhua) -- Citigroup Inc. reported surprised earnings Friday thanks to the sale of its Smith Barney unit to Morgan Stanley.

    Citigroup, the fourth big U.S. bank to report strong results for the quarter, earned 3 billion U.S. dollars, or 49 cents per share, after paying preferred dividends.

    The New York-based bank, which has received 45 billion dollars from the government, lost 2.59 billion dollars, or 55 cents per share, during the same quarter last year.

    Citi's profit was driven by the sale of a majority stake in its Smith Barney brokerage unit to Morgan Stanley.

    Meanwhile, the bank is facing mounting loan losses as the recession continues. According to the quarterly report, Citi has set aside 12.68 billion dollars to cover loan losses during the second quarter, compared with 7.1 billion dollars in the same period last year.