ECONOMY

Citibank may end local retail activity

The current international credit crisis could drive Citibank out of all its retail activities in Greece, including mortgage and consumer credit. The major losses of the hitherto mighty credit giant from the subprime mortgage loan crisis are forcing Citibank to make a radical shift in its mode of operation as well as to a redistribution of its capital around the world. Against this background, it is likely that the bank will depart from retail activity in Greece, where it has already frozen its mortgage loan issuing, even though the bank has not yet officially confirmed it. In a statement, the bank stressed that due to the disproportionate rise in the cost of money, the special offers for mortgage interest rates and commissions are no longer applicable. «We would like to make it clear that we continue to offer mortgage loans, maintaining the low fixed rates from three to 25 years. The recent developments in the sector of mortgages do not affect our existing clients nor the long-term development strategy of Citibank in Greece,» the statement reads. The market is full of rumors about significant changes on the way at Citibank Greece, with the drastic reduction of retail activities and the bank’s focusing instead on major companies and the supply of investment services to wealthy clients. The credit crisis and the massive rise in the cost of money have created major problems for small-scale local banks. The combination of the high cost of money and limited cash flow is posing pressing questions of survival for certain banks.