Citigroup Inc. posted a 27% decline in second-quarter profit on Friday as the third-largest U.S. bank added reserves for potentially sour loans and its investment banking business took a hit from a slowdown in corporate dealmaking.

Profit fell to $4.5 billion, or $2.19 a share, in the quarter ended June 30, from $6.2 billion, or $2.85 a share, a year earlier.