It's still ugly for Citigroup: a third-quarter loss of $2.8 billion and another round of loan-related write-downs, losses, and charges totaling $13.2 billion.

But the bad numbers were much smaller than feared, adding to the hopes spurred by the solid results from J.P. Morgan Chase and Wells Fargo that the troubled banking industry may at last be steadying.

Steady for Citi is a fairly relative concept. It staggers from quarter to quarter, cutting jobs and shedding assets and taking billions of markdowns. Ratings agencies continue to question the quality of the assets on its books.

The chief executive, Vikram Pandit, has overhauled the executive ranks and has been downsizing the bank and cutting risk. In the last quarter alone, 11,000 jobs (about 3 percent of its workforce) and some $50 billion in assets were shed—roughly the equivalent of a midsize American corporation.

"While our third-quarter results reflect both a difficult environment as well as continued write-downs on our legacy assets, we are making excellent progress on the parts of our business we control, including expense reduction, head count, and balance sheet and capital management," Pandit said in a statement. "We expect these improvements will enable us to realize the full earnings power of our franchise as the economy stabilizes."

Throwing ballast overboard during a storm is one thing. Steering the supertanker that is Citi into more favorable waters is quite another.

In its one strategic gambit of late, seeking to acquire the banking operations of Wachovia, Citi came off the loser, seeing Wells Fargo swoop in to clinch a deal.

There are no easy solutions for a bank that failed to sparkle even during a boom. This will be a long, scary turnaround, even with assistance from the Treasury Department and the Federal Reserve.

As a rival, Jamie Dimon of J.P. Morgan put it on Wednesday, "If you are not fearful, you are crazy."

Over the last four quarters, Citi has lost $20.2 billion.

In the third quarter, the bank took a write-down of $2 billion of structured-investment-vehicle assets, a write-down of $1.15 billion on Alt-A mortgages, a write-down of $166 million on auction-rate securities, a write-down of $919 million on exposure to bond-insurance agencies, and another $1.7 billion of write-downs on loans and other investments.

It had $4.9 billion in net credit losses and took a charge of $3.9 billion to increase loan-loss reserves.