Croats line up outside scandal-hit Rijecka Banka

RIJEKA (AP) – Dozens of depositors were lining up in a bank here yesterday to check on their money after the bank reported unspecified losses due to a trader’s mismanagement of foreign currency funds. Rijecka Banka, 60-percent owned by the Bavarian Bayerische Landesbank, said late Thursday its chief foreign currency trader, Eduard Nodilo, had been arrested on charges he abused his position and forged accounts. The bank, which dominates the banking industry in northwestern Croatia, refused to disclose details, but one of its executives, Borislav Perozic, insisted the bank was liquid. «Our clients can sleep peacefully,» Perozic was quoted as saying in yesterday’s issue of the daily Novi List. Croatia’s Central Bank also said the bank’s operations were «not in question» due to its solid capital. Still, the bank’s shares fell 37 percent Thursday on the Zagreb Bourse. No major firms withdrew deposits from the bank, but residents of Rijeka, where the bank is based, lined up to check their money was safe. Many chose to withdraw their funds. Croats generally are suspicious of banks because of their past experience: thousands lost their savings in the late 1990s when several banks collapsed, mainly as a result too-generous lending to cronies of the late President Franjo Tudjman. Croatian media reported yesterday that Nodilo had made risky and unauthorized transactions with the bank’s hard currency and lost money in the dollar-euro trade. Instead of reporting the losses, media said he falsified reports. The bank has declined to specify how large losses it has suffered, but Perozic said the loss was «much smaller» than the 60 million euros ($53 million) some media outlets speculated the bank had lost. Mirjana Kulas, spokeswoman for Rijeka police, said yesterday that Nodilo, 50, remained in detention while the investigation continued. The Croatian government, which holds 25 percent of Rijecka Banka’s shares, refused to comment.

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