* Asian bank shares drop on Citigroup concerns
* Citi in talk with U.S. to create "bad bank" - reports
* Yen edges higher on safe-haven buying
* Japanese markets closed for public holiday
By Rafael Nam
HONG KONG, Nov 24 (Reuters) - Asian share markets fell
around 1 percent on Monday, with bank stocks leading the drop,
and so-called safe-haven assets like the yen gained as
investors cautiously eyed potential U.S. measures to prop up
Citigroup.
Reports that U.S. New York Federal Reserve President
Timothy Geithner will be nominated as the new U.S. Treasury
Secretary boosted Wall Street on Friday, but had less impact in
Asia, which had already ended last week higher as investors
thought recent falls to five-year lows were excessive.
Oil edged up as Geithner's appointment eased some
uncertainty about the transition in U.S. economic policy, while
expectations OPEC might cut output again as early as this week
also helped.
Doubts about Citigroup's ability to survive remained a
major factor for global markets, as the U.S. lender struggles
with mounting losses from credit cards, mortgages and toxic
debt.
"I don't think the news is going to change the overall
environment. We are still very much in risk aversion mode,"
said Sharada Selvanathan, a currency strategist at BNP Paribas
in Hong Kong, referring to a potential U.S. government deal
with Citi.
The MSCI index of Asia-Pacific stocks excluding Japan
<.MIAPJ0000PUS> was down 1.7 percent at 0230 GMT. Japanese
markets were closed for a public holiday.
Asian shares have dropped 61 percent so far this year, with
the bulk of these losses accumulated after the collapse of
Lehman Brothers <LEHMQ.PK> in mid-September.
Banks in the region were among the hardest hit on Monday,
including Hong Kong-listed shares of HSBC <0005.HK>, South
Korea's KB Financial Group <105560.KS> and Commonwealth Bank of
Australia <CBA.AX>.
Citigroup <C.N> is looking at putting risky assets in a
government-supported "bad bank" -- a step to reassure investors
that the rest of its assets were safe, according to reports on
Sunday. CNBC reported that the government's priority was to
give Citigroup a $10-$20 billion equity infusion, but this
would not preclude other actions to help the bank.
[]
Shares in South Korea <> slumped more than 2 percent.
Shares in Hong Kong <>, Australia <>, Shanghai
<>, Taiwan <> and Singapore <.FTSTI> fell 1-2
percent.
Caution ahead of a potential announcement regarding
Citigroup dominated trade elsewhere as well, with the yen
pushing higher as market players cut exposure to
higher-yielding currencies.
Safe-haven capital flows have benefited the Japanese
currency as investors, in times of stress, tend to sell assets
financed with the cheaply-borrowed yen.
The dollar fell 0.8 percent from U.S. trade on Friday to
95.18 yen <JPY=>, and the euro was down 0.7 percent at 120.01
yen <EURJPY=R>.
Gold retreated to $792.05 <XAU=> from New York's notional
close of $799.45 on Friday after safe-haven buying had earlier
in the session kept alive a rally that saw prices gain more
than 7 percent to their highest in five weeks.
Oil prices rose 37 cents to $50.30 a barrel <CLc1>, giving
up some of the earlier gains of more than 2 percent. The
Organization of Petroleum Exporting Countries meets on Saturday
in Cairo amid speculation it could cut production.
