Alwaleed plans to up his stake in Citigroup to 5%

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Nov 20: Saudi billionaire Prince Alwaleed bin Talal plans to increase his stake in Citigroup Inc. to 5% after the US bank lost almost a quarter of its value on Wednesday.

Alwaleed, who now owns less than 4% of the New York- based company, said in a statement he’s buying shares because he “strongly believes that they are dramatically undervalued.’’

Citigroup, the biggest US bank before the credit-market crisis struck last year, has raised about $75 billion since December by selling assets and equity stakes. The figure includes a $25 billion injection from the US Treasury last month. Chief Executive Officer Vikram Pandit said this week the bank will cut 52,000 jobs over the next year, twice the target announced in October, as loan losses surge and the economy shrinks. Alwaleed, 53, said those steps will help “make it a long- term winner in the financial-services industry.’’ He said he “expresses his full and complete support to Citi management, led by CEO Vikram Pandit, and believes they are taking all the necessary steps to position the company to withstand the challenges facing the banking industry and the global economy.’’

The bank has lost money in each of the past four quarters as bad loans increased and demand for banking services declined. Analysts surveyed by Bloomberg expect a $673 million deficit for the fourth-quarter. Citigroup was surpassed in market value on Wednesday by US Bancorp, Minnesota’s largest bank. Shares of the company reached their lowest in 13 years as analysts predicted more losses in 2009. The stock, down 78% this year, traded at $6.73 in New York at 7:38 a.m., up from $6.40 at the close on Wednesday.