RUSSIA'S GUTA BANK(A RUSSIAN TOP 20 BANK) SUSPENDS OPERATIONS

by Miker12, Tuesday, July 06, 2004, 10:50

Russia's Guta Bank Suspends Operations
The Associated Press
Published: Jul 6, 2004

MOSCOW (AP) - Guta Bank, one of Russia's top 20 banks in terms of assets and capital, said Tuesday that it is unable to service its clients, according to a notice posted on the doors of several of its Moscow branches, Russian news agencies reported.

"In connection with the outflow of more than $344 million in June and a significant increase in payments in July, Guta Bank is not able to make checking account payments and payments from savings accounts," one notice said.

The Gazeta.ru news site reported Monday that the bank had been refused a $400 million loan by state-owned Vneshtorgbank, which would have been pledged against the bank's industrial assets.

Interfax quoted Guta Bank sources as saying that "technical reasons" were behind the suspension of Guta's operations.

A crisis of confidence has hit Russia's smaller and medium-sized banks, but Guta would be by far the largest casualty to date.