Citigroup at 9-year low on capital, write-down worries

By James Cordahi and Jonathan Stempel

DUBAI/NEW YORK (Reuters) - Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) shares sank to their lowest level in more than nine years on Tuesday after a prominent Middle East investor said the largest U.S. bank needs to raise more capital and an analyst projected a $15 billion mortgage write-down.

Shares of Citigroup, a Dow Jones industrial average .DJI component, closed down 99 cents, or 4.3 percent, at $22.10, their lowest close since November 1998. The shares fell as much as 8.1 percent earlier in the session.

Speaking at a private equity conference, Sameer al-Ansari, the head of Gulf investment agency Dubai International Capital, said Citigroup may need "a lot more money" from investors, after billions of dollars of write-downs tied to subprime mortgages had depleted the bank's capital.

New York-based Citigroup in January slashed its dividend 41 percent, and since November has raised some $30 billion of capital from investors including Abu Dhabi, Kuwait, Singapore and Saudi Prince Alwaleed bin Talal.

"It's going to take more than that to rescue Citi," al-Ansari said. Dubai International Capital manages $13 billion of assets, and has invested in such lenders as HSBC Holdings Plc (HSBA.L: Quote, Profile, Research, Stock Buzz) and India's ICICI Bank Ltd (ICBK.BO: Quote, Profile, Research, Stock Buzz).

Citigroup is comfortable with its capital levels, and isn't seeking new funds from outside investors, a person briefed on the matter said on Tuesday.

Separately, Merrill Lynch & Co analyst Guy Moszkowski said he now expects a first-quarter loss at Citigroup of $1.66 per share.

The analyst said Citigroup may have write off $15 billion of its $37 billion of exposure to subprime mortgages and collateralized debt obligations.