Prince investor says Citigroup is on course for profit

Kingdom Holding, whose 4.2 per cent stake in Citi is its most prized asset, has overcome the worst of the crisis and was set to close 2009 with a profit after an $8 billion loss in 2008, the prince said yesterday in a rare interview.

Sitting on the 66th floor of his Kingdom Tower in the Saudi capital, Alwaleed hammered home a positive message about the recovery of both Citi and Kingdom Holding after unveiling a surprise capital decrease last week for the investment vehicle.

"The turnaround for Citi now is already happening. The shares are up right now, so the worst is over," he said. "I'm expecting 2010 to be profitable for Citi.

"We are looking for positive results in … 2011 for Citi, which will reflect automatically on the results of Kingdom Holding."

Surrounded by female assistants dressed mostly in power suits and shirts – a far cry from the top-to-toe black robe the conservative kingdom's women wear in public – the prince said he hoped the first quarter of 2010 would be profitable for Citi too.

Alwaleed declined to say whether he would keep his shares in Citi no matter what happened to the bank.

His first investment in Citi was during troubled times: He injected $590 million into the bank in 1991. Alwaleed told Fortune magazine in 2007 that the price he paid in 1991 for Citi shares was $2.75 each, taking into account subsequent share splits.

The investment has played a big role in raising both his personal profile among hundreds of third-generation Saudi princes who are grooming themselves for greater influence in domestic politics and that of Kingdom Holding, which started off as a consulting business.

"Kingdom Holding stayed profitable in the fourth quarter of 2009," Alwaleed said, after analysts suggested the capital reduction scheme could be aimed at cushioning losses in the fourth quarter of 2009