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Quick Hits: Citi to Get $350 Million from Saudi Prince

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Brief scrutiny of today's headlines.

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Citigroup's (C) new prince may lead the company out of the financial wilderness.

Prince Alwaleed bin Talal, a Saudi billionaire, plans to invest about $350 million to boost his stake in Citigroup to 5% from 4%.

Citigroup needs the cash after 4 straight quarters of losses totaling about $20 billion. The company has raised about $75 billion since December, including $25 billion from the US Treasury.

CEO Vikram Pandit says the bank plans to cut about 52,000 jobs next year, or twice the number announced in October. Citigroup's stock has plunged nearly 80% this year as bad loans piled up and demand for banking services fell.

In a statement reported by Dow Jones, Alwaleed expressed "his full and complete support to Citi management led by Vikram Pandit, and believes they are taking all the necessary steps to position the company to withstand the challenging facing the banking industry and the global economy."

Alwaleed supported the bank's merger with Travelers in 1998. He withdrew his backing of former CEO Charles Prince last year, clearing the way for Pandit to move into the executive suite.

Citi loaned money to Alwaleed early in his career, and some say this may have impaired his judgment as an investor. In 2005, Alwaleed told Public Broadcasting that he looks for annual returns of 20% to 25% in 5 to 10 years. Citi hasn't returned anything close to that in the last decade.

Sentimental or not, Alwaleed's investment is good news for Citigroup - it's a long road back, assuming the road leads anywhere.

For more on Charles Prince, check out Hoofy and Boo's always astute report.

No positions in stocks mentioned.
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