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Citibank has cut all lending in Denmark

This comes from the Danish daily Berlingske Tidene. It suggests that Citibank is cutting back all international lending. Citigroup has sold its German operations to a French bank and I understand they are cutting credit lines in the UK as well. In seeing all these stories together, one gets a full view of the kind of cutbacks now ongoing at troubled banks like Citigroup.

Update: 20 Feb 2009 1552EST: I have yet to see confirmation as to whether ‘cutting’ credit lines means reducing or stopping new credit availability. It is also unclear whether this is credit under the ‘quick and easy loan’ programme or under all Citibank activities. I will update the post accordingly when that information is available.

Citibank has stopped lending

- We are not offering loans at the moment because of the economic situation.
That is the message when you call to get a Citibank Denmark ‘quick and easy loan.’

The Bank has just closed itself for what banks are best: lending money. And it is still uncertain when Citibank will start lending money again, writes Ekstra Bladet Netsite, eb.dk.

Finn Ostrup who is a professor of Finance at Copenhagen Business School, believes that Citibank Denmark’s American owner, Citigroup, is about to go bankrupt.

“Citigroup would have gone bankrupt in December, unless they had been helped by the U.S. Government.

“They are still threatened with bankruptcy, and I think that is why they will not lend more money,” says Finn Ostrup to Ekstra Bladet.

For Danish Citibank customers bankruptcy could be a hard blow.

“If Citibank terminates loans, they might not be paid back right away,” says Finn Ostrup.

“If that happens, customers may try to obtain money elsewhere. But if Citibank does not have the option of canceling loans, customers will have no problems,” he says.

Ekstra Bladet tried all day to get a comment from the responsible representatives from Citibank, but failed.

Source
Citibank har stoppet udlån – Berlingske Tidene

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.

4 Comments

  1. anon says:

    The Danish article leaves many matters unclear. Primarily does this only cover risky “Quick and Easy” loans or are they actually stopping all lending?

  2. @anon,
    I would assume it is the risky lending i.e. “Quick and Easy” loans only until further confirmation from Citi. While they me cutting back all lending I can’t believe they are stopping all lending.

    But, Citi is retreating from the international scene quickly. There is a report out that they are looking to exit Brazil as well:
    http://dealbook.blogs.nytimes.com/2009/02/20/citigroup-to-sell-part-of-redecard-stake-report-says/

    The long and short is this: Citi is deleveraging. They need to cut back to their core assets to preventa worst-case scenario (nationalization)