Saudi Prince Alwaleed Bin Talal says that Citigroup should “unload all the assets” it has in Citi Holdings, where executives parked many controversial and loss-making assets during the economic downturn.
Alwaleed, one of the biggest investors in Citi, and who has a portfolio of more than $16 billion, says that Citi Chief Executive Officer Vikram Pandit now should know that his “honeymoon” is over and investors are going to get aggressive with demands for excellent performance.
“So right now we hope that the worst is over," Alwaleed tells Forbes magazine
"I met Vikram (Pandit). I told him, ‘The honeymoon is over now and 2010 has to be the year whereby you begin showing the world that you are a force to be reckoned with and get back Citigroup's name to where it was pre-2007 crisis,’” says Alwaleed.
“The big issue right now is how to unload all the assets in Citi Holdings, which is, really, the bank that they want to get rid of. That's where all the controversial and loss-making assets are parked in.”
The old-model that Citi embraced during the 1990s is no longer tenable.
“You know, the one-stop shopping was the model and it completely backfired," he says.
"And, frankly speaking, right now they are going back to the pre-merger with Travelers whereby you're going back to the bread and butter, Elementary 101 business of being Citibank and taking all those extra things that really caused Citibank to be in this crisis lately,” says Alwaleed.
Alwaleed is pressuring the CEO of Citi to execute.
But he’s not alone among big investors pressing on Pandit now, including “Abu Dhabi, Singapore and the Kuwaits” who have “invested huge amounts also,” says Alwaldeed.
The pressure seems to be working.
The trade journal, The American Banker, reports that Citi’s massive, $7.6 billion loss in the fourth quarter of 2009 has a silver lining, as it reflects “a shrinking pile of loans gone bad.”
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