Saudi growth: (Chuck) Prince meets Prince (Alwaleed bin Talal) and says sorry
At the start of April, Chuck Prince, chairman and CEO of Citigroup, came to Riyadh to lobby the Saudi finance ministry, central bank and capital markets regulator to let the US firm back into the kingdom less than two years after Citigroup sold off its 20% stake in Samba (previously Saudi American Bank). It was one of the early big decisions of Prince’s tenure as CEO and signalled the end of Citigroup’s presence in a country where it had operated since 1955.
Citigroup sold out of Samba, which it had managed under contract since 1980, just as the Saudi economy began to boom and the banks to score huge profits. Citigroup recorded a $760 million gain on the sale of its holding but shareholders missed out on the Saudi growth story. Prince can’t bear to miss out for much longer. He says: “Our confidence in the Saudi economy is strong and we look forward to re-establishing Citigroup’s presence in the kingdom.”
Prince Alwaleed bin Talal, a leading shareholder in both Citigroup and Samba, hosted a cordial lunch for all parties at his resort in Riyadh. What does the host make of Citigroup’s chances of readmittance? “Citigroup came here to apologize for the error they committed when they pulled out from Samba, against my advice, and pulled out of Saudi Arabia at a time when we needed them here to give confidence to international investors when Saudi Arabia was getting hit from all sides.” So, perhaps not such a cordial lunch, then?
Alwaleed continues: “They want a new licence, and making apologies is the first step.” He suggests that his own Kingdom Holding Company might be a partner for Citigroup in Saudi Arabia.