Dubai backpedaling on Citi

Maybe every day doesn’t bring more bad news about Citi (C) after all. Citi shares dropped 4% on Tuesday after Sameer al-Ansari, the head of Dubai’s sovereign wealth fund, said at a private equity conference that the struggling New York-based bank will need more than the $30 billion it has already raised to muddle through the mortgage mess. “It will take a lot more than that to rescue Citi and other financial institutions,” Bloomberg had him saying. It will “take a lot more money” to pull Citi through the mortgage mess, he told Reuters.

That all seems clear enough, but DealBook at The New York Times notes that Dubai is now backing away from the statements. “Dubai International Capital has never expressed an opinion on the investment merits or financial condition of Citi,” the sovereign wealth firm said in a press release issued Wednesday. “Further, we have not been privy to any non-public information about the company, neither has Citi approached Dubai International Capital for a capital raise.”

As nice as the sentiment is, it isn’t doing Citi any good just yet. Shares fell 4% in a marketwide selloff Thursday to within a penny of Tuesday’s nine-year low.  Even so, Dubai’s statement indicates it has the big picture in view. ”Dubai International Capital maintains an ongoing relationship with Citi and has substantial respect for the company,” Wednesday’s press release reads. Not to mention a desire to steer clear of protectionist-minded sovereign wealth bashers in Congress.