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PRESS RELEASE


Citigroup in Trouble:
Arab Funds Say `Cannot Save It'

March 5, 2008 (EIRNS)—Shares of struggling Citigroup Inc fell yesterday to their lowest level since November 1998 after the head of a Dubai-owned investment firm said the largest U.S. bank needs to raise many billions more in new capital in order to survive its massive losses, and that Middle East wealth funds could not save it.

Sameer al-Ansari, chief executive officer of Dubai International Capital, said Citigroup would need "a lot more money" on top of some $30 billion already raised from investors including Abu Dhabi, Kuwait, and Saudi Prince Alwaleed bin Talal. "It's going to take more than that [$30 billion] to rescue Citi," al-Ansari told a private equity financial conference.

Ironically, al-Ansari's warning came just three days after Federal Reserve Chairman Ben Bernanke told the U.S. Senate that U.S. banks would be failing in the worsening financial crash, but "only small banks" and regional institutions. Of course, by the time Citigroup takes huge new write-offs of worthless security assets from its books this quarter, it may be a "smaller" bank. And its collapse could take a hundred small banks down with it.

Merrill Lynch & Co. put the latest dagger in: Its analysts published on March 4 that they expect Citigroup to have to write down, in the first quarter, $15 billion more of its $37 billion of exposure to sub-prime mortgages, and collateralized debt obligations, and $3 billion of loans to commercial real estate and leveraged buyouts—a total of at least $18 billion more. This would make for net quarterly losses as big or bigger than the $9.8 billion Citi lost in the fourth quarter of 2008, and thus require a large new infusion of capital, or bust.