Print this article

Kuwait Investment Fund Mulls Pulling Cash From Citigroup - Report

Tom Burroughes

10 December 2009

The Kuwait Investment Authority is thinking of reducing its banking links with Citigroup, possibly leading to transferring funds deposited with the US bank, the Financial Times reported, citing unnamed sources.

According to KIA officials, most of Kuwait’s oil revenues are deposited at Citi – a decades-long relationship. The KIA deliberations have taken place in recent months while the fund was in the process of selling Citi shares it acquired in January 2008. The KIA said at the weekend that  it had completed the sale of its stake for $4.1 billion, making a profit of $1.1 billion, the newspaper said.

The KIA’s internal talks on changing its relationship with Citi reflect irritation with what is seen as a lack of communication on the bank’s part, according to people familiar with the matter.

Middle Eastern-based investors have become important sources of capital to a number of Western banks in recent years, buoyed by the oil-fuelled wealth of the region. Citi, along with a number of its peers, is in the process of attempting to repay US bailout money.