Magazine article American Banker

Despite Problems, Citibank Holds on in El Salvador

Magazine article American Banker

Despite Problems, Citibank Holds on in El Salvador

Article excerpt

Next month, Citibank's El Salvador branch will mark its 23th year of continuous business operation. The event is noteworthy because Citibank is the only U.S. bank with a local banking business in El Salvador.

The Bank of America, San Francisco, which has had a branch there for a shorter period of time and never had as many banking privileges, has scaled back its activity and now has only a legal representative in the country.

But the occasion won't really because for celebration at Citibank, for the extent of its business is nowhere near the level it was during the days before the revolution. At that time, Citibank was a pioneer in Salvadoran banking circles, introducing sophisticated credit analysis and extending long-term business loans for the first time. In addition, the branch had a steady flow of deposits into its retail banking operation.

All that has changed now. Citibank closed its ground floor office in San Salvador, the nation's capital, several years ago after it was "decorated twice by bombs," as branch manager Siegfried Guth euphemistically put it. It now has consolidated its operations on the second floor of the same building, which is across the street from the Camino Real Hotel where the foreign press and media make their headquarters.

In addition, after the government nationalized banks in 1980, it set a deadline for Citibank to stop taking deposits one year later. That date has since been extented several times, with December 1985 as the new deadline. …

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