Jan. 11 (Bloomberg) -- Citigroup Inc., the largest U.S. bank, rose on speculation its second-biggest holder plans to increase his stake.

Citigroup added 45 cents, or 1.6 percent, to $28.56 at 4 p.m. in New York Stock Exchange trading after gaining as much as 4.1 percent. The advance followed speculation Saudi Prince Alwaleed bin Talal, who owned 4 percent as of June, may raise his investment, traders said.

Analysts at two investment banks predicted today that Citigroup may report a writedown next week of up to $16 billion to cover losses on securities backed by subprime mortgages.

``To counter the bad news, it's said Prince Alwaleed may increase his position and invest up to another $15 billion,'' said Michael Mainwald, head of equity trading at Lek Securities Corp. in New York.

Heba Fatani, a spokeswoman for Alwaleed's Kingdom Holding Co., didn't respond to an e-mail requesting comment.

Banks and securities firms in the U.S. and Europe have turned to Asian and Middle Eastern governments for about $34 billion to prop up balance sheets battered by writedowns from the collapse of the U.S. subprime market. Citigroup received about $7.5 billion from Abu Dhabi last year.

``The cash infusion rumor has been going around all morning,'' said Joseph Saluzzi, the co-head of equity trading at Themis Trading LLC in Chatham, New Jersey.

The shares rose 2.3 percent yesterday after the Wall Street Journal reported it is seeking as much as $10 billion from foreign investors as mortgage-related losses deepen.

JPMorgan analysts including Vivek Juneja estimated today that New York-based Citigroup may write down $14 billion in the value of its assets, including collateralized debt obligations, leveraged loans and commercial mortgage-backed securities.

Bear Stearns analyst David Hilder increased his estimate by 31 percent to $16 billion, saying the Journal report yesterday suggests a larger-than-estimated loan loss provision in the fourth quarter.

To contact the reporters on this story: Jeff Kearns in New York at jkearns3@bloomberg.net; Eric Martin in New York at emartin21@bloomberg.net.

Last Updated: January 11, 2008 16:53 EST