The biggest problem of the banking system in the context of thecrisis stemmed from the fact that some banks "gave money withouthaving it", that is financing lines from parent companies, and oncethose started making them more expensive, the domestic subsidiariesraised the cost of money in the entire Romanian system, launching avery tight competition for deposits, states Shahmir Khaliq, generalmanager of Citibank Romania, the subsidiary of one of the world'slargest financial groups.
Until the rising unemployment trend halts, he does not believebanks can be expected to revert to aggressive retail lending.
Around 85-90% of Citibank revenues come from multinationals andlarge Romanian companies and the rest from SMEs. However, inmid-2009 Citi started working on the project of a true retailoffer, which reached the market in October, 13 years after theAmericans' arrival in Romania.
"We took this step despite the crisis because we do not thinkshort-term".
Khaliq says the retail offer primarily targets the category ofmanagers, who do not have much time and are comfortable workingwith the Internet.
"(...) Our target is to use the best technological solutions tobe able to provide services at the lowest costs (...)", Khaliqsays.
He maintains the new business will break even in 2011, withselling more products to a client as a major goal.
Kumar Ramachandran, the head of the retail department, expectssales in the new card line launched with the retail product rangeto revolve around 20,000.
He says the bank has an "aggressive" budget on theconsumer-banking segment for 2010.
Citi's individual client offer will include a new type ofspecial deposit that allows clients to deposit their money in acertain currency and withdraw it in another currency at maturity.For wealthy clients with various risk appetite levels, the bankwill distribute investment products of major internationalfinancial groups such as Goldman Sachs starting next year.
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