Citigroup Inc is to shut almost half its branch network in Greece, where retail banking activity has dried up because of the country's debt crisis. Citi, the last major international bank with a countrywide presence in Greece, will cut its network to 21 branches from 37 by shutting all branches outside Athens and Thessaloniki, it said in a statement on Wednesday.
About 170 jobs will go, nearly a tenth of the lender's total workforce in the country. "The current business and economic environment requires adaptability... we will focus more on investment, deposit products and credit cards," a spokeswoman for Citi's Greek operations said. Other foreign banks such as Credit Agricole and Societe Generale have sold the Greek businesses they bought during the country's economic boom, when lending expanded at double-digit rates following Greece's entry into the euro.
But since Greece's debt crisis took hold in late 2009, lending has shrunk and non-performing loans have soared partly as a result of austerity measures under the country's international bailout and also from the country's deepest recession since World War II. Citi, which entered Greece in 1964, had a smaller-scale presence than the French banks and did not buy a local lender.
Several other foreign companies have pulled out of Greece completely because of the crisis, including French retail giants Fnac, Carrefour and Saturn Hansa, the consumer electronics unit of German retailer Metro. UK-based coffee shop chain Costa Coffee suspended operations at its ten Greek stores earlier this week. Other foreign firms, such as Swedish furniture maker IKEA, are cutting wages.
Still, lower labour costs, as a result of austerity measures imposed by the country's international lenders, may be beginning to attract logistics and manufacturing jobs. Computer giant Hewlett Packard agreed last week to use Greece's biggest port as a transport hub for south-east Europe and North Africa. Consumer products giant Unilever also plans to shift part of its manufacturing to Greece from other European countries, the government said last week.