Saudi Arabian Prince Walid bin Talal last year took a significant hit to his personal wealth when Citigroup’s collapsed.
But the prince is keen on the banking giant now that the U.S. government has propped up the firm with a federal bailout.
“This is a fantastic opportunity. Now is the time to buy,” Prince Walid told Prestige Magazine. “I’m totally, 100 percent optimistic and realistic.”
The prince is the largest investor in Citi’s stock after the government. Prince Walid invested in the company 20 years ago and has stuck with it from its apex at the height of the banking boom to its nadir in 2009.
Citi’s shares are portrayed as one of his “most successful investments” on the Web site of Kingdom Holdings, the prince’s publicly listed investment vehicle. The $590 million he invested in 1990, during the S&L crisis, gave him a 5 percent stake in Citicorp. That was worth about $9.2 billion two years ago, when Citigroup’s stock was skyrocketing.
The 217 million Citigroup shares he now owns are worth about $600 million. That's a 94 percent decrease from the peak, and just $10 million more than they were worth 20 years ago.
The prince’s speculative investments in real-estate development projects and luxury hotel chains like the Four Seasons failed to offset Citi’s losses. Kingdom Holding reported an 83 percent drop in first-quarter profit because of investment losses, according to The New York Times. But with gas prices climbing again, the oil magnate may not be too worried.
Citibank is essentially already owned by the federal government. The Wall Street Journal reported it has received insurance on $300 billion in deposits, some $63 billion in FDIC-guaranteed debt, and another $300 billion or so in taxpayer guarantees of its toxic assets, $45 billion in direct capital injections, and more. It is, along with Bank of America, the weakest of the major American banks.
Earlier this month, the Journal said the federal government should allow Citi to fail.
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