Alwaleed endorses Citigroup CEO, rejects breakup

NEW YORK (Reuters) - Saudi Prince Alwaleed bin Talal, Citigroup Inc.'s (C.N) largest individual shareholder, said he has confidence in Chief Executive Charles Prince and does not want to see a breakup of the biggest U.S. bank, according to a published interview.

Alwaleed's comments in the May edition of Institutional Investor magazine come 10 months after an interview with Reuters in which he had called on Prince to make "draconian" cost cuts.

"We have to give Citigroup some time to perform," Alwaleed told the magazine. "(First-quarter results) have beaten their estimates on both the revenue side and the EPS (earnings per share) side. So I hope Citigroup is on the right track. We are monitoring the situation. We are very close to Chuck Prince, and he has our vote of confidence."

Alwaleed's comments come amid pressure on Prince from some shareholders to boost revenue, keep costs down and help improve Citigroup's stock price.

Citigroup spokesman Mike Hanretta declined to comment.

Earlier this month, an affiliate of a hedge fund run by Edward Lampert disclosed a 0.3 percent stake in Citigroup, raising speculation the billionaire might push for changes.

"I am adamantly against breaking up Citigroup," Alwaleed continued. "I see this as a bad idea that should not even be considered. Citigroup obviously has divested some underperforming assets. But really, Citigroup has to be a conglomerate under one umbrella."

Citigroup this year sold its trademark red umbrella to Travelers Cos. (TRV.N).

But in December, Prince had said at an investor conference: "If you were to separate the company into pieces and think of the analogues to the pieces, would I rather have them all together? (I would) clearly rather have them together."

Citigroup shares closed Wednesday up 29 cents at $55.20. They are down 1 percent this year, while the 24-member Philadelphia KBW Bank Index .BKX is little changed. Since Prince took over in October 2003, Citigroup shares are up 21 percent, while the KBW index is up 34 percent.