“I expect a similar operating result in 2009, on growing incomes, but a large portion of these money will be invested in the development of the retail division we prepare to launch in fall”, said Khaliq.

In 2008, Citibank Romania reported net profit of around 23 million euros, up 1% from a year earlier.

Khaliq added the bank would primarily rely on the resources of its Romanian subsidiary and capital in excess for the launch of the new retail division.

“We have capital surplus based on the balance of payments data, the capital adequacy ratio standing at 17% according to 2008 full-year data. The loan-to-deposit ratio is at 63%, probably the market’s lowest”, Khaliq had said in a previous statement.

Currently, the retail loan book is very low, he said, the bank focusing primarily on large and small businesses.

“The bank’s main clients are large companies, and SME client portfolio is lower than that of large corporations. I think we will stay focused on SME sector but we see narrower increases compared to previous years”, said the managing director of Citibank Romania.

However, Khaliq expects the new retail division to bring the bank in the front line, next to other banks better positioned in the segment.

“We don’t intend to open a unit at every street corner, but we do plan to devise an efficient customer-oriented offering”, said Khaliq.

Despite the decrease of Romania’s risk premium calculated through CDS spreads, lending will recover once the recession ends, unemployment rates will fall and the NPL ratio will drop, Khaliq said.