UPDATE 2-Citigroup taps Merrill director for investment bank

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NEW YORK, Sept 4 (Reuters) - Citigroup Inc (C.N) on Thursday said it hired Alberto Cribiore as vice chairman of its institutional clients group, and Cribiore has resigned from the board of directors of Merrill Lynch & Co MER.N.

Cribiore will join Citigroup on Monday and report to John Havens, chief executive of the institutional clients group, which includes the investment bank. He will work closely with Raymond McGuire and Albert Verme, who run the investment bank.

The hiring was announced less than two months after Michael Klein, who chaired the institutional clients group and was once considered a possible candidate to run all of Citigroup, announced plans to leave the largest U.S. bank by assets.

Cribiore joins a growing list of outsiders to assume senior positions at Citigroup since Vikram Pandit became chief executive of the New York-based bank in December.

Cribiore has been managing partner of Brera Capital Partners LLC, a private equity firm he founded in 1997. He will remain Brera's non-executive chairman as the firm continues its planned liquidation, Citigroup said.

Cribiore had been on Merrill's board since 2003 and was its lead director. He was a key figure in the ouster of Stanley O'Neal as Merrill chief executive last October, as mortgage losses began to mount.

Following the ouster, Cribiore became interim non-executive chairman, and chaired the committee to find O'Neal's successor. Merrill eventually hired John Thain, who had run NYSE Euronext (NYX.N) (NYX.PA), as chief executive.

Citigroup is trying to shed assets, improve efficiency and restore investor confidence after $17.4 billion of losses over the last three quarters. Its shares have lost close to two-thirds of their value since early 2007.

In morning trading, Citigroup shares fell 36 cents to $19.25 on the New York Stock Exchange. (Reporting by Jonathan Stempel; Additional reporting by Juan Lagorio; Editing by Steve Orlofsky and John Wallace)