By Mehnaz Yasmin and David Henry (Reuters) -Citigroup Inc shares surged on Friday after the third-largest U.S. bank posted a smaller-than-expected 27% drop in quarterly profit on usual strength in its treasury services business and its trading desks cashed in on market volatility, cushioning a slump in investment banking. Citi shares rose more than 10% in mid-morning trading in New York. Revenue at the markets business jumped by a quarter to $5.3 billion, thanks to volatility in the commodities and foreign exchange markets — a particularly strong segment for the bank. Trading has emerged as a…