* Notes Citi Holdings (bad bank) turned its first profit since the unit was created following the financial crisis (48.52 +1.52)
* Making headwinds in cost reduction
International franchise is performing well; Korea seeing notable improvement... reducing the drag of Citi Holdings... says trade finance showing improvement.
* Sees improved revenue performance in 2H
* Retail Banking: Down YoY on lower mortgage refinancing activity. Up QoQ on higher mortgage revenues and improved deposit spreads offset by a one-time gain in 1Q'14
* Fixed Income Revenues -22% q/q; Equity -25% q/q; Security Services +7% q/q
* Expects NIM to remain flat with Q2 levels over 2H14 (Q2 NIM was 2.87%, down 3 bps q/q)
* Citi Holdings will remain profitable for rest of 2014
* Overall market conditions will be improved in 2H14
* Consumer banking revenues should grow in 2H14... sees revenue growth in International Consumer in 2H14... says core operating expenses will continue to decline... have an overall favorable outlook in terms of credit performance; expects reserve releases to be lower in 2H14... expect tax ratre to be broadly in line with 1H14 level of 32%.