Citigroup Inc. and smaller regional banks on Thursday posted higher quarterly profits, as low U.S. interest rates fueled growth in mortgage and credit card loans and reduced banks' own borrowing costs.

But Bank of New York Co Inc.'s profits in the fourth quarter fell because of a charge tied to problem loans and large corporate bankruptcies in the weak U.S. economy.

Losses from energy trader Enron Corp.'s massive bankruptcy, on top of economic turmoil and a currency devaluation in Argentina, also knocked $698 million out of Citigroup's results, but sales of consumer loans like mortgages and credit cards in the United States and abroad offset the damage.

``Revenue is higher than expected, in part because of high net interest income, in part because of securities gains,'' J.P. Morgan analyst Catherine Murray said of the banking results so far. ``The flexibility provided by securities gains is allowing banks to be more aggressive on asset quality.''

Loan demand and mortgage refinancings rose at Citigroup and other regional banks like Milwaukee-based Marshall & Ilsley Corp. and Birmingham, Alabama-based Regions Financial Corp. after 11 interest rate cuts last year by the Federal Reserve. The cuts also lowered banks' own borrowing costs, while stock market turmoil led many people to deposit money in bank accounts rather than investing in stocks. This provided another cheap funding source to banks.

U.S. bank stocks rose on Thursday. Citigroup shares rose 77 cents, or 1.6 percent, to $50.07. Regions rose 40 cents to $30.75 and Marshall & Ilsley added 13 cents to $60.47. Bank of New York fell 26 cents to $42.97 a share.

New York-based Citigroup, the No. 1 U.S. financial services company, reported a 36-percent rise in net profits to $3.88 billion, or 74 cents a share, in the fourth quarter, including a $13 million gain for the reversal of some restructuring charges. That compared with $2.84 billion, or 55 cents a share, in the 2000 quarter, after $491 million in charges related to its purchase of consumer finance company Associates.

Excluding merger charges and other one-time items, Citigroup earned $3.86 billion, or 74 cents a share, in the quarter, up 16 percent from $3.33 billion, or 65 cents a share, in the 2000 quarter. These results include a $228 million hit from Enron and a $470 million hit from Argentina's economic woes in the quarter.

``Citigroup's numbers were fantastic, given all that's gone on in the quarter,'' UBS Warburg analyst Diane Glossman said. ''Including about $700 million in charges from Enron and Argentina, they were able to beat most analysts' expectations even with having to carry this albatross.''

Profits at Citigroup's consumer arm, which includes credit cards and mortgages, rose 20 percent to $2.03 billion in the fourth quarter from the 2000 quarter.

At Citigroup's global corporate division, which includes its investment and corporate banking business, profits rose 4 percent to $1.32 billion. The unit pulled in fees from helping companies issue bonds and it cut expenses. But write-downs related to Argentina restrained results. Citigroup was Wall Street's largest underwriter of stocks and bonds last year.

``It looks very good on the surface,'' Fox-Pitt, Kelton analyst Jonathan Balkind said of the quarter. ``Even with hits from Argentina and Enron, the company still beat the Street by a penny. Investment banking was very strong -- much stronger than our expectations...Investment banking results were revenue-driven.''

Midwest bank Marshall & Ilsley posted a 28 percent rise in quarterly net profits, as low U.S. interest rates fed growth in mortgages. The bank earned net profits of $108.3 million, or 98 cents a share, in the quarter, compared with $84.3 million, or 78 cents a share, in the 2000 quarter.

Southeast U.S. regional bank Regions' quarterly profits rose 8 percent, to $138.2 million, or 60 cents a share, in the fourth quarter. That compared with $128.4 million, or 58 cents a share, in the 2000 quarter.

But regional bank and trust company Bank of New York Co.'s quarterly profits fell 11 percent, after a previously announced charge tied to the sale of problem loans and corporate bankruptcies in the weak U.S. economy.

The New York-based bank earned $331 million, or 45 cents a share, in the fourth quarter, compared with $372 million, or 50 cents a share, in the 2000 quarter.

Last year's fourth-quarter results include a $235 million provision and charge related to the sale of problem loans Bank of New York made to 24 telecommunications firms and one energy-trading company, which it did not identify.

Enron's bankruptcy, the largest one ever, as well as generally slack corporate profits, left many banks with bad debts in the quarter.

The results also include a $175 million insurance claim recovery related to the Sept. 11 attack on the World Trade Center. The bank, headquartered in downtown New York near the site of the attacks, had to evacuate its offices and spend money to fix technology systems damaged in the twin towers' destruction.

For Oakland, California-based savings and loan Golden West Financial Corp., quarterly profits rose 53 percent, again on low growth and lower deposit costs.

Golden West earned $228 million, or $1.44 a share, in the fourth quarter, compared with $149 million, or 93 cents a share, in the 2000 quarter.