Jan. 20 (Bloomberg) -- Kingdom Holding Co., the investment company controlled by Prince Alwaleed bin Talal, reported a fourth-quarter loss of almost 31 billion riyals ($8.26 billion) after Citigroup Inc. shares plunged in the credit crisis.

Kingdom Holding fell 6.8 percent in Riyadh. The company reported its latest results on the Saudi bourse Web site today after the market closed.

“The loss is phenomenal,” John Sfakianakis, chief economist at Saudi British Bank, said in an interview today by telephone from Riyadh. “This is the biggest corporate story for Saudi Arabia in many years.”

Citigroup lost more than 75 percent of its market value last year as its capital base was eroded by the credit crisis. The global bank recorded more than $85 billion in writedowns and losses tied to mortgage-related securities and was forced to accept $45 billion in U.S. government rescue funds.

Alwaleed, 53, is the largest individual investor in New York-based Citigroup. Kingdom Holding said Nov. 20 that Alwaleed planned to boost his Citigroup stake to 5 percent.

The Saudi billionaire is increasing his holding in the struggling bank after a year in which his investments failed to keep pace with regional benchmarks. Riyadh-based Kingdom Holding dropped 62 percent, more than Saudi Arabia’s Tadawul All-Share Index.

Stocks Plunge

The net loss for Kingdom Holding compares with earnings of 255.6 million riyals in the year-earlier period, the company said. The full-year loss was 29.9 billion riyals, or 4.75 riyals a share.

Kingdom Holding dropped to 4.1 riyals today, bringing the decline in 2009 to 13 percent and giving the company a market value of 25.8 billion riyals.

Kingdom Holding was also hurt by the decline in global stock markets. The company holds 7 percent of New York-based News Corp., Rupert Murdoch’s media company, and 21 percent in Songbird Estates PLC, according to Bloomberg data.

“It’s not a surprise given how far global markets have fallen that some of his investments would see a drop of that magnitude,” said Emad Mostaque, a London-based Middle East equity fund manager at Pictet Asset Management Ltd., which oversees about $100 billion globally.

Kingdom Holding, which sold 315 million shares at 10.25 riyals apiece in July 2007, is the ninth-largest company on the Saudi exchange by market value, lagging behind Saudi Basic Industries Corp. and Saudi Telecom Co., the two largest companies on the bourse.

Brand Name Investments

Alwaleed, a nephew of the late King Fahd bin Abdulaziz al- Saud, has stood out among more than 2,000 Saudi princes for his stock picking. After earning a bachelor’s degree from Menlo College near San Francisco, he returned to the Persian Gulf and parlayed an inheritance of less than $1 million into a billion- dollar fortune in the 1980s, mostly through real-estate investments, according to Riz Khan’s biography “Alwaleed: Businessman, Billionaire, Prince” (William Morrow, 2005.)

The Prince built his fortune by investing in brand-name companies he considered undervalued, including Apple Inc. and Time Warner Inc.

Forbes magazine estimated he was worth $21 billion in March, ranking him 19th among the world’s billionaires.

To contact the reporters on this story: Shaji Mathew in Dubai at shajimathew@bloomberg.net; Glen Carey in Dubai at gcarey8@bloomberg.net

Last Updated: January 20, 2009 10:11 EST