The stock market rebound helped sales of variable annuities at Citigroup Inc., New York, during the second quarter.[@@]

The company’s Travelers Life & Annuity unit watched net written premiums and deposits for fixed annuities fall 24% during the quarter, to $135 million, as net production for variable annuities rose 31%, to $1.3 billion.

At the company’s Primerica unit, variable annuity production increased 54%, to $263 million.

Citigroup as a whole is reporting $1.1 billion in net income for the latest quarter on $22 billion in revenue, compared with $4.3 billion in net income on $19 billion in revenue for the second quarter of 2003.

Net results include more than $5 billion in charges for settling past and current litigation. Excluding the litigation charges and other unusual gains and charges, earnings amounted to about $5.3 billion, Citigroup says.

Life insurance and annuity balances increased 23%, making Citigroup’s life and annuity business one of its fastest-growing businesses in terms of customer balances. But executives note in a second quarter earnings review that the life and annuity operations generated an annualized return of only 18% on invested capital. That is much higher than Citigroup’s cost of capital but lower than the return Citigroup is earning on other major business lines, executives report.