Citigroup reported on Monday that the Abu Dhabi Investment Authority will invest $7.5 billion in the U.S. largest bank, offering needed capital to offset huge losses from mortgages and some other investments.

The money from the sovereign investment fund of the Gulf Arab state, which has been a beneficiary of this year's surge in oil prices, will be convertible into 4.9 percent of Citigroup Inc.'s equity. Citigroup characterized the investment as passive and said the fund will not be able to name any board members to the bank.

The Investment Authority would become one of Citi's largest shareholders.

The Abu Dhabi investment, which was expected to close within the next several days, will be considered Tier 1 capital for regulatory purposes, helping Citi reach its main goal of returning to its target capital ratios in the first half of 2008.

Citigroup's shares have lost about 45 percent of their value since the beginning of 2007, wiping away $124 billion in market capitalization, as the drumbeat of bad reports about its investment losses has increased.