Citigroup Inc. (C) may be based in New York, but it's gaining more of a Middle East influence.

The financial conglomerate on Thursday added to its close history with the region by sending Alberto Verme, co-head of its investment bank, to Dubai. Verme will be the first major U.S. investment-banking chief stationed in Dubai and the latest in a series of ties made between Citigroup and the region's growing financial community and clout.

Citigroup said Verme's assignment "underscores Citi's commitment to the Middle East, one of the world's fastest-growing and most important regions, and is consistent with Citi's efforts to deploy its best leaders against its most important and promising growth opportunities."

In November, a cash-strapped Citigroup solicited a $7.5 billion investment from Abu Dhabi Investment Authority. That move, along with other sovereign-fund investments in U.S. financial institutions, stirred controversy about foreign intentions and the safety of U.S. banks.

But what has been new for some banks is familiar territory to Citigroup. Saudi Prince Al-Walid bin Talal owns more than 5% of Citigroup through investments he began building in the 1990s. Citigroup has a 50-year presence in the region, which it groups internally with Africa and Europe.

Critics may wonder why Dubai, part of the United Arab Emirates, a nation of only four million, and not China or India? Although the country's coffers swell with oil wealth, nearly 20% of the population lives below the poverty line.

The answer may lie in focus. China and India are building economies still largely based on manufacturing. Dubai and Abu Dhabi are aggressively building financial infrastructure as evidenced by their willingness to invest in U.S. banks and European stock exchanges.

The company said Verme will continue to share global responsibility for investment banking with Ray McGuire, who remains based in New York.

-By David Weidner, 415-439-6400; AskNewswires@dowjones.com

  (END) Dow Jones Newswires
  05-08-08 1149ET
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