The heart of the global economy just headed slightly closer to total seizure as the credit crunch hardened severely in the UK. Citibank, which made crack dealer-like profits trading credit on the back of subprime borrowers during the credit bubble, now feels the after effects setting in and is bailing out, on the UK.
Joining other investment banks, the increasingly beleaguered American bank has closed Future Mortgages, its mortgage operation and CitiFinancial, its unsecured loans business. The move will lead to the loss of 700 jobs as 49 CitiFinancial branches, employing 300 people, and its Doxford call centre, employing 400, will be closed.
That is bad news for those losing their jobs, but eventually the true impact may be felt by one and all.
The news has been met with dismay by advisers who claim it is now virtually impossible to find a deal for a client with a less then perfect credit history.
Chris Mottola, mortgage consultant for Southampton-based Choice Financial Solutions, said credit conditions had become so stringent many clients were now simply stranded on high-interest deals.
He said: “It is just impossible to find anyone wishing to lend. The ones officially left in the market are actively seeking to put off any potential customers. To be honest, it can be a bit of a nightmare.”
No one lending, no one borrowing, no credit flow, heart attack, that’s another word for Nightmare.
