NEW YORK (CNN/Money) - A surge in bankruptcies ahead of the tough new bankruptcy law that took effect Monday could cut Citigroup's fourth quarter net income by more than $310 million, the company's financial chief Sallie Krawcheck said.

The news came as Citigroup (Research), the world's largest financial services company, reported a 35 percent jump in third quarter earnings.

On the company's earnings call with analysts, Krawcheck said Citigroup, which recorded a $124 million loss in the thrid quarter as consumers rushed to file for bankruptcy ahead of the new law, expects the fourth quarter impact to be more than two and one-half times the third quarter loss.

She added that the current wave of bankruptcies is "an acceleration of losses that we would have seen later on" and the company doesn't plan to raise its overall loss assumptions in its North American credit card business. The company expects to see better results in the comparable period next year.

Jeffery Harte, senior research analyst at Sandler O'Neill, said Wall Street had anticipated a spike in bankruptcy filings ahead of the new legislation which will impact banks across the board. He added banks may take a hit now but the bankruptcies "will benefit banks in the tail end" because those losses won't appear in upcoming quarters.

And executives at New York-based Citigroup added that even with the surge in bankruptcies, underlying credit remains stable.

Still, overall net income for New York-based Citigroup increased to $7.14 billion, or $1.38 a share, from $5.31 billion, or $1.02, a year earlier.

Profit from continuing operations fell 1 percent to $4.99 billion, or 97 cents per share. Analysts on average expected earnings of 99 cents per share, according to earnings tracker Thomson First Call.

The pickup in third-quarter bankruptcies and continued pressure from due to rising short-term interest resulted in slower growth at the company's consumer bank

Consumer banking profit fell 13 percent to $2.72 billion. Retail banking profit dropped 13 percent while cards dropped 7 percent and consumer finance slid 23 percent.

But that weakness was offset by a 35 percent jump in corporate and investment banking revenue.

Citigroup's corporate and investment bank recorded $1.8 billion in profit, 24 percent jump from last year, as revenue climbed to $6.4 billion.

Krawcheck said "the pipeline continues on record levels for the corporate and investment bank."

In the investment bank, capital markets and banking profit rose 23 percent to $1.42 billion and transaction services profit rose 14 percent to $327 million.

Profit nearly tripled to $339 million in alternative investments and fell eight percent to $306 million in wealth management. Assets totaled $1.47 trillion.

Citigroup, which took a $222 million charge, or four cents a share, in the third quarter as a result of Hurricane Katrina, said the company doesn't expect a major impact from the earthquakes in South Asia. In a conference call, Krawcheck said the company doesn't expect an incremental negative impact from Katrina going forward.

CEO Prince said Citigroup, which repurchased $5.5 billion in stock in the third quarter, expects the company to be active when it comes to stock buybacks going forward.

And he added that the company is on track to complete its five-point plan by the end of the year. Earlier this year, Prince implemented rigid ethics guidelines – called the five-point plan – which includes code-of-conduct training each year and increased resources for compliance and auditing.

Prince made the moves after a number of embarrassing scandals hit its international businesses, including its private bank in Japan, which resulted in Prince publicly bowing in apology to the country's financial regulators.

The Federal Reserve also blocked the company from making any more acquisitions until it gets its compliance issues in order.

During the call, Krawcheck said the company won't make any acquisitions purely to indicate that it is no longer restricted by the Fed.

She said prices for potential targets are high and the company isn't willing to do dilutive deals or jeopardize its debt rating by being imprudent when it comes to acquiring.

Separately, Krawcheck said the bank's exposure to scandal-embroiled Refco "will not be meaningful" and the bank will be able to absorb any losses associated with the troubled futures-trading firm.

--------------------------------------------------------------------------------------

Click here for the rest of today's headlines.