GOVERNMENT ENDORSES REPORT BY BANK REHABILITATION AGENCY

( Editorial: --> 4190 ) ZAGREB, Apr 2 (Hina)- At its session on Thursday, the Croatian Government endorsed an annual report for 1997 by the state agency for deposit insurance and bank rehabilitation. During 1997 the agency made a profit of about 800 thousand dollars, general manager Mladen Sunjic said. He pointed out that the agency had been founded to bolster the stability of the financial sector through rehabilitation of Croatian banks and strengthening of the people's confidence in soundness of Croatian savings institutions by deposit insurance. The deposit insurance system came to effect on 27 June 1997, in order to help citizens who could not asses the soundness of different savings institutions unaided. The system guarantees 100 per cent restitution of all deposits up to 4.6 thousand dollars and 74 per cent restitution for the difference between 4.6 thousand dollars and 7.6 thousand dollars. According to Sunjic, the agency has already compensated 300 clients of the Vukovarska banka bank, which filed for bankruptcy in late February. Slavonska banka, Rijecka banka, Splitska banka and Privredna banka have already been rehabilitated, said Sunjic. Splitska and Rijecka banka are being restructured and their shares floated at stock exchanges, as a step towards privatisation, said Sunjic. In a part of the session closed for the press, the Government decided to rehabilitate Dubrovacka banka. Talking to the press after the session, Governor of the Croatian central bank Marko Skreb said that so far rehabilitation had cost 4.7 billion dollars, which equals 30 per cent of Croatia's annual GDP. Yet, that balance is not final, considering that part of the profits of successfully rehabilitated banks, such as Splitska and Rijecka, is being channelled back to the state budget, Skreb said. He added that some of the funds generated through the privatisation process would also be poured back into the budget. (Hina) jn mr 021858 MET apr 98