Citigroup (C) is standing firm against releasing loan loss reserves on its mortgage portfolio because of the overhang of foreclosures that have yet to hit the market.

The banking giant's primary concern is its mortgage portfolio as it continues to wind down assets in Citi Holdings, Chief Executive Vikram Pandit said on a conference call Monday. But in response to the substantial foreclosure backlog, ongoing political headwinds and risks from a weakening U.S. economy, Pandit said the New York-based bank has not released any loan loss reserves against its mortgage portfolio to date.

The bank, however, released $984 million in loan reserves against nonmortgage-related lines of business in the second quarter.

Citi’s total allowance for losses stood at $27.6 billion at quarter-end, or 4.3% of total loans, compared to $34.4 billion, or 5.4%, in the prior year period.

John Gerspach, Citi chief financial officer, who is perennially negative on the mortgage business, said he remains cautious in overestimating the meaning of green shoots throughout the nation.

“As far as the risk of the foreclosure overhang, there are still a lot of foreclosures in process that have yet to hit the market,” Gerspach said. “I don’t look at this as being a robust housing situation. Maybe a little bit of it comes from the fact that I lived through the mortgage issues of the early 1990s. It took years for that to clear up, and in comparison the early 1990s were small potatoes compared to what we’re going through now. So I need to see a little more evidence.”

Citigroup posted a second-quarter profit of $2.95 billion on revenue of $18.6 billion as the bank on Monday noted growth in both loans and deposits.

Analysts note that the quality of Citi’s mortgage portfolio has improved relative to its reserves, leading to the possiblity of a trigger that would allow the bank to release reserves. Competitor JPMorgan Chase (JPM), evidently, has flipped that trigger.

JPMorgan reported last week that it reduced loan-loss reserves by $2.1 billion in the second quarter, mostly for the mortgage and credit card portfolios. “The good news is that these reductions reflected meaningful improvements in delinquencies and estimated losses in these portfolios,” the bank said in a statement. “We continue to maintain strong reserves."

Repurchase losses at JPMorgan totaled $10 million in the second quarter, vastly below the $223 million in the year-ago period and $302 million in the first quarter.

Wells Fargo (WFC), on the other hand, added $239 million worth of provisions to its mortgage repurchase loss reserve in the second quarter, raising its reserve total to $669 million — 56% more than its first-quarter provision of $430 million. “We believe the additional reserve is appropriate to cover losses associated with these higher expected demands,” Wells Fargo Chief Financial Officer Tim Sloan said on a conference call Friday.

Gerspach said as Citigroup begins to incur credit losses in relation to the national mortgage settlement, it will release reserves to cover those losses. “Those loans have been fully reserved for, so we will be doing some level of reserve release," he said.