Chuck Prince must be breathing easier after Citigroup (NYSE:C) announced a second consecutive quarter of strong earnings growth. Many shareholders have been impatient with the CEO's leadership of the global banking conglomerate, but the bank's improving performance seems to be taming critics. Should Citigroup investors expect the recent trend of strong earnings growth to continue?

Citigroup's second-quarter revenue increased to $26.6 billion, a 20% improvement over the same period last year. Much of the revenue growth came from international business, which increased by a sizzling 34% over the previous year and now represents nearly half of the bank's total revenue. Extending Citigroup's retail and commercial banking operations to fast-growing international markets has been a key element in the bank's strategic plan, and Prince must be pleased that overseas investments are starting to show impressive results.

Operating expenses grew by only 16% in the second quarter. Deteriorating credit quality, however, forced the bank to increase its loan provisioning costs by 50%. So in spite of the bank's apparent success in controlling costs -- an important strategic goal -- a potentially more dramatic improvement in the bank's bottom line was offset by the same credit problems bedeviling the banking industry. Net income grew to $6.2 billion in the second quarter, an 18% improvement. Earnings per share increased to $1.24, which was also an 18% improvement. At a recent price of $51, Citigroup's shares now trade around 12 times earnings.

Citigroup's markets and banking unit powered the quarter's strong earnings by contributing $2.8 billion to the company's net income on revenue of $9 billion. The unit's fixed-income markets revenue grew to $3.4 billion -- proof that fixed-income traders were exceptionally productive during a quarter when bond investors were jittery about the meltdown in subprime mortgages. Equity trading and investment banking also contributed substantially to the group's record revenue and profits.

Meanwhile, the global consumer group, Citigroup's largest unit, continued to be the bank's biggest source of problems. Revenues grew by 8% to $13.7 billion, but net income slipped by 15% to $2.7 billion. Perhaps not surprisingly, U.S. consumer businesses, such as retail banking and credit cards, were responsible for most of the decline. Lower credit card balances, higher credit costs, and rising expenses in connection with new branch openings were important factors in the consumer group's lower profitability.

International consumer businesses still have not achieved the higher levels of profitability that the bank has been promising shareholders. Excluding the Japan consumer-finance business, which has been in the midst of a restructuring following recent regulatory changes in that country, revenues at the international consumer unit grew by 25% as a result of both organic growth and strategic acquisitions. Net income, however, slipped by 3%, in part the result of higher credit costs.

The global wealth management unit, which includes the Smith Barney brokerage group, generated $514 million of net income on $3.2 billion of revenue. Net income grew by 48% as a result of increasing sales and higher fees for assets under management. An increased stake in Japan's Nikko Cordial brokerage also drove revenues and income higher. The bank's relatively small alternative-investments group, which manages hedge funds and private-equity investments, expanded both revenues and net income by 77%, largely a result of higher asset values.

Citigroup's improving bottom line must be a welcome development to the bank's shareholders, who are undoubtedly frustrated by the sluggish stock performance. Certainly, higher net income is more desirable than the alternative. But the sources of Citigroup's rising income do not fully address critics' concerns that the bank has become too unwieldy and bureaucratic to be managed effectively.

Citigroup has been highly dependent on its markets and banking unit to deliver profit growth, but investment-banking revenue is cyclical, and trading income can be quite risky. Neither activity represents the kind of steady global franchise that Prince promotes in his vision of a fully integrated bank that stretches around the world. Moreover, to the extent that Citigroup's recent progress has been driven by the bank's campaign to cut costs, future gains in net income will have to come from revenue growth rather than from increased efficiency. As long as the performance of Citigroup's giant global consumer unit remains so uneven, it would be foolish to expect the recent trend in earnings growth to continue.

With rivals Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM) also generating negative stock returns year-to-date, Citigroup's problems may be less visible than they have been in recent years. Investors should nevertheless consider Citigroup's turnaround to be a work in progress.

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Fool contributor Michael Leibert welcomes your feedback. He owns shares of Bank of America. The Fool has a disclosure policy.