Citigroup's reported higher third-quarter earnings on Monday, as the bank set aside less money to cover bad loans and recorded an accounting gain. Citigroup, the third-largest U.S. bank by assets, reported net income of $3.77bn, up from $2.17bn a year earlier. The results included a pre-tax gain of $1.9bn due to the bank's widening credit spreads during the quarter. Excluding that gain, Citi earned $2.6bn. The bank — which received two U.S. government bailouts at the height of the financial crisis — is seeing its problem loan portfolio shrink. Nonaccrual loans fell to $7.95bn from $12.46bn in the same quarter last year. The bank's share price has fallen about 40% this year, in line with declines for other large banks. The earnings report has been kind to Citi's stock today, which is up 2.7% despite the market being down as a whole. [CNBC, 10/17/11]