KUWAIT CITY: Kuwait Investment Authority (KIA), the emirate's sovereign wealth fund, has no plans to sell its stakes in US banking giants Citigroup and Merrill Lynch, the finance minister said in comments published on Sunday.

"The KIA has no intention of exiting from Merrill Lynch and Citigroup in the near future as its (investment) policy is based on a long-term vision," Mustafa al-Shamali said in a written reply to a question by a lawmaker, carried by the local media.

In late 2007, state-owned KIA acquired stakes worth three billion dollars in Citigroup and two billion dollars in Merrill Lynch, which was acquired by Bank of America last year. It did not disclose the size of the stake at the time.

Shamali said in comments published in Al-Qabas and Al-Rai dailies among other newspapers that the purchase came at a time when the US banks were suffering from the US housing slump amid the subprime mortgage crisis.

He however said that by the end of November, 2008, the stake in Citigroup was worth just 2.4 billion dollars and in Bank of America just under one billion dollars.

KIA in the meantime received returns worth 318 million dollars from the two investments up to the end of last year, Shamali said.

Kuwaiti MPs have repeatedly criticised KIA and the finance minister for making such investments, highlighting that the stakes' value was currently lower than three billion dollars due to the global financial crisis.

At the time of Kuwait's purchase, the Abu Dhabi Invsetment Authority (ADIA), the sovereign wealth fund run by the government of the UAE capital, also bought a stake worth 7.5 billion dollars in Citigroup to become one of its biggest shareholders.

Established in 1982, KIA manages two state reserve funds the value of whose assets reached around 300 billion dollars before the global economic meltdown.

There is no current official figure on the holdings of the funds, but the government said in February that they lost around 33 billion dollars in value, though independent reports said the losses were much higher.