Alwaleed Sees Citigroup Returning Capital to Holders in 2012
April 24 (Bloomberg) -- Citigroup Inc., the third-biggest U.S. bank by assets, is likely to step up efforts to return capital to shareholders in 2012 after resuming dividend payments this year, the lender's largest individual shareholder said.
"Citigroup has announced publicly that 2012 will be the year of returning shareholders' capital," Saudi Arabia's Prince Alwaleed Bin Talal told reporters in Kuwait today. "No doubt that the one-cent dividend is very symbolic and for the short- term."
Prince Alwaleed, the chairman of Saudi Arabian investment firm Kingdom Holding Co., owns a 0.75 percent stake in Citigroup, according to data compiled by Bloomberg.
Citigroup said March 21 it would resume paying a quarterly dividend of 1 cent per share in the second quarter after a 1- for-10 reverse stock split. Citigroup hasn't paid a quarterly dividend since 2009, when the financial crisis eroded the bank's capital. The bank took a $45 billion bailout and taxpayers guaranteed more than $300 billion of its risky assets.
Chief Executive Officer Vikram Pandit said in a Jan. 18 conference call that returning capital to shareholders, either through a dividend or a share buyback, was "a 2012 thing."
"No doubt, Citigroup is on the right track. Citigroup is doing very well these days," Alwaleed said today.
------ flashback 2008 ---------
Nov. 20 2008 (Bloomberg) -- The Warren Buffett of the Gulf is taking a bigger hit from the credit crunch than the original.
Prince Alwaleed bin Talal was lauded by Time magazine as the Middle East's answer to the Sage of Omaha after a 1991 investment in Citigroup Inc.'s predecessor helped make the Saudi billionaire one of the world's five richest people.
This year, Alwaleed's investments aren't keeping pace with regional benchmarks, let alone Buffett. His Riyadh-based Kingdom Holding Co. has slumped 63 percent -- more than Saudi Arabia's Tadawul All-Share Index or Buffett's Berkshire Hathaway Inc. -- wiping out $13 billion in value. Kingdom today said Alwaleed will boost his Citigroup stake, his largest holding, to 5 percent, even after the shares fell more than 80 percent since Jan. 1.
"When people nail their colors to the mast in such an obvious way, if then it all blows up, then that's very damaging to your reputation," said Ken Murray, chairman of Blue Planet Investment Management in Edinburgh, who says he shorted shares in Citigroup last year.
Alwaleed and his companies are buying Citigroup shares because the prince believes they are "dramatically undervalued," Kingdom Holding said in a news release. The combined stake stands at less than 4 percent after recent Citigroup share sales diluted the holding, Kingdom said.
"Prince Alwaleed is fully confident that Citigroup's universal banking model and global franchise will make it a long- term winner in the financial services industry," Kingdom said.
