Will Citigroup be forced to trim the fat?

Citigroup biggest shareholder has warned that the investment bank's costs are out of control.

The Financial Times reports that Saudi Prince Alwaleed bin Talal has called for "draconian" measures to curb the "disease" of spiraling costs. The Prince pointed to a 16% rise in operating expenses in the second quarter, compared to a 10% increase in revenue.

"That is like taking one step forward and two steps back," Alwaleed reportedly said. He urged Citigroup to rein back expenses now before recession "forced it to cut costs somewhere else."

Citigroup bankers may not be the only ones with something to worry about. The Financial Times also refers to a recent report by JP Morgan, which said German banks still have the highest domestic cost income/ratios in Europe.