NEW YORK/LONDON: Citigroup Inc was profitable in the first two months of 2009 and is confident about its capital strength, Chief Executive Vikram Pandit said, easing concerns about the bank's

survival prospects and sending its shares up 38.1 percent.

"I am most encouraged with the strength of our business so far in 2009," Pandit wrote in a memo to staff on Monday. "We are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007."

Citigroup earned $2.2 billion in the July-September period in 2007, the last quarter it made money. Analysts, on average, expect it to post losses through September. Pandit became chief executive in December 2007.

"You can't say the first two months were the best since 2007, and then blame March later," said Ralph Cole, who helps invest $2 billion at Ferguson, Wellman Capital Management in Portland, Oregon. "Pandit is putting his own credibility on the line. This absolutely raises the bar.

"Citigroup shares closed up 40 cents at $1.45, the biggest one-day percentage gain since Nov. 24. Pandit's forecast sparked a rally in U.S. stocks, with the Dow Jones industrial average rising 5.8 percent and the Standard & Poor's 500 jumping 6.4 percent.

Among other banks that face many of the same market pressures as Citigroup, Bank of America Corp and JPMorgan Chase & Co rose 28 percent and 22.6 percent, respectively. The KBW Bank Index gained 15.6 percent.