Citi moves to reassure UAE customers

DEPOSITS GUARANTEED: Citibank has moved to reassure customers their money is safe. (Getty Images)

Citibank on Sunday moved to reassure customers in the UAE their money is safe as Citigroup's plummeting share price raises doubts about the bank's ability to survive.

Citibank, the retail banking arm of Citigroup, said in a statement all customer deposits were guaranteed by the UAE government in line with a federal cabinet ruling on Oct. 13.

The bank, which has been operating in the UAE since 1964, said deposits with foreign banks that had "significant operations" in the UAE were guaranteed under the ruling.

Citigroup's shares lost 20 percent of their value on Friday, closing at $3.77, down 60 percent for the week and reaching their lowest level since December 1992.

Citigroup was on Friday reported to be in talks with the Federal Reserve and the US Treasury Department to discuss its options, which include an endorsement from the government and another capital injection from the Treasury.

Citigroup's market value fell to $20.5 billion on Friday. That's less than the $25 billion taxpayer-funded injection that Citigroup just received from the federal government, and a fraction of the $75 billion of capital that Citigroup has raised since the credit crisis began last year.

The bank's market value topped $270 billion in late 2006.

The latest declines left Citi smaller by market value than each of Canada's top three banks: Bank of Nova Scotia, Royal Bank of Canada and Toronto Dominion Bank.

Citigroup's market value is now also in line with Goldman Sachs Group. Investors speculated on Friday that Goldman might look to buy Citigroup, but a person familiar with Goldman's strategy said it is not interested.

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