RIYADH, 1 August 2007 — Kingdom Holding Company (KHC), one of the world’s largest and most diversified investment groups, yesterday announced that its investment in Citi, the global financial services group, continues to perform strongly following the publication of Citi’s second quarter results for 2007. Citi reported a net profit for the 2007 second quarter of SR23 billion, up 18 percent with international revenues up 34 percent.
KHC Chairman Prince Alwaleed: “Citi’s earnings demonstrate the ability of the company to achieve geographic and product diversification. We are very much encouraged by management’s focus on and dedication to improving operating leverage while continuing to invest in the business. These results are a testament to the strength of the Citi franchise around the world.”
Citi Chief Executive Officer Charles Prince said: “We have very clear priorities to drive growth and we are executing on all of them. We generated record revenues, up 20 percent, and record earnings from continuing operations, up 18 percent, both driven by our record international results. We also began to implement the structural expense initiatives announced in April which are generating improved efficiencies. These initiatives coupled with a strong revenue growth, drove positive operational leverage this quarter and helped offset increased credit costs.”
KHC first invested in Citi in 1991 and identified it as an undervalued company with a strong brandname and considerable upside potential at a time when Citi was facing difficulties. Consequently, KHC acquired Citi shares and remained a core shareholder with an ownership 3.6 percent and has proved to be one of its most successful investments. As of Dec. 31, 2006, KHC’s investment in Citi has yielded a lifetime internal rate of return of 27.4 percent per annum.
