Citigroup paid out $210 million for loan buybacks in both the first and second quarters, according to company executives.
Chief financial officer John Gerspach told investors and analysts Friday the bank increased its loan buyback reserve by $345 million in the second quarter, to $750 million.
Citigroup posted profits of $2.7 billion for the second quarter partially due to a $1.5 billion release of loan loss reserves.
However, the CFO warned that its North American residential mortgage holdings are under stress from unemployment trends, home prices, government modification programs and state foreclosure programs.
"Noncurrent loans and delinquencies continue to improve largely as the result of loss mitigation efforts we are undertaking, including sales of delinquent mortgages and modifications," Gerspach said during a conference call. "We will continue to pay attention to this portfolio," he added.
Citigroup's North American consumer banking operations originated $11.2 billion in residential mortgages in the second quarter, up from $10.3 billion in the first quarter, but down 61% from a year ago.
Citigroup Chief Executive Vikram Pandit said he has no plans to follow Wells Fargo and close its consumer finance arm. CitiFinancial's clients will continue to "need credit and our services," he said.
