SINGAPORE: The Government of Singapore Investment Corp (GIC), Singapore's biggest sovereign-wealth fund, is still sticking with its bets on Wall Street banks.

GIC, which has ploughed billions into Citigroup and UBS, told Reuters that it was holding on to its investments.

"GIC is a long-term investor and will continue with its investments in Citigroup and UBS," a GIC spokesman said yesterday.

Last week, Singapore's other state investor, Temasek, said it had sold a 3 per cent stake in Bank of America, resulting in an estimated loss of about US$3 billion (S$4.4 billion).

The sale has stoked investor concerns that GIC and other sovereign funds might follow suit.

Singapore's two funds have suffered from the global market turmoil, with GIC's portfolio falling 25 per cent from a peak estimated at US$300 billion, while Temasek's assets declined by 31 per cent during March to November last year.

After being hit by paper losses, GIC agreed to convert its preferred Citi shares at US$3.25 a share in February, compared with an original price of US$26.35 a share.

But its investment is now in the black as Citi shares closed at US$3.64 yesterday.

Said a banker who has advised sovereign-wealth funds on merger-and-acquisition deals: "If you look at Citi, it turned out to be pretty good for them."

GIC's second major Western bank investment is UBS, which plays an important role in cementing Singapore's goal of becoming Asia's premier wealth centre. --REUTERS