By David Benoit

Citigroup Inc.'s second-quarter profit fell 73%, weighed down by $7.9 billion the bank set aside for potentially rising loan losses.

The spread of the novel coronavirus around the globe and the resulting economic slowdown have pummeled the banking industry and raised concerns about loan defaults by consumers and big businesses alike.

The bank posted a profit of $1.32 billion, down from $4.8 billion a year earlier. At 50 cents per share, the results exceeded the average analyst estimate of 35 cents a share, according to FactSet. Per-share earnings were $1.95 a year ago.

Revenue rose 5% to $19.77 billion.

Citigroup's loan-loss provision included $2.21 billion in net charge-offs and $5.7 billion it added to its reserves for loans that might default in the future. Analysts had expected the total would be $7.36 billion.

Lenders have responded to the pandemic by allowing customers to temporarily skip payments. But banks are bulking up for a potential wave of defaults and delinquencies later this year, especially if the virus continues to spread.

Citigroup had already put aside $7.03 billion in the first quarter for potentially souring loans and now has a total $28.28 billion allowance for loan losses as of the end of June.

Citigroup shares are down 35% this year, in line with the KBW Nasdaq Bank Index but worse than the broader market. Bank stocks have underperformed as investors have braced for loan-loss provisions and lower margins to eat away profits. Shares rose 1.5% to $53 premarket.

Revenue in the bank's consumer operations was down 10% to $7.34 billion. Spending volume on the bank's credit cards fell 24%.

Offsetting some of the pain was a strong quarter in the corporate and investment bank, where revenue rose 21% to $12.14 billion.

The corporate and investment bank was powered by a surging trading business, where revenue rose 55%. Its fixed-income trading operation posted $5.6 billion in revenue, up 68%.

Write to David Benoit at david.benoit@wsj.com