SMALL DANISH BANK STOPS PAYMENTS - INSPECTORATE
A small Danish private bank, the
6.Juli Banken A/S, stopped payments today following a need for
considerably higher provisions against loan losses, the
Government Bank Inspectorate said in a statement.
    Officials at the 6. Juli Bank were not immediately
available for comment and calls to the Copenhagen head office
were intercepted by an operator who said the office was closed.
    The Inspectorate statement said: "Payments have been stopped
out of regard for the depositors." This would allow closer
investigation with a view to reconstruction and "negotiations on
this have started."
    The statement said: "The inspectors have inquired into
certain financial transactions involving considerable
extraordinary income in the submission of the 1986 balance
sheet. The inspectors have not found themselves able to approve
this book entry.
    "The inspectors have further examined the bank's liquidity
position and its commitments and have established the need for
considerably higher provisions against losses on loans."
    The bank is independent and has four branches in the
Copenhagen area. Details of previous profits were not
immediately available.
    A spokesman for the Danish Banks Association said that the
6.July Bank was one of the smallest of Denmark's 80 banks, with
balance sheet total of 861 mln crowns at end 1985, the latest
year for which figures were available.
    Denmark's banking legislation stipulates that equity
capital and savings must be at least eight pct of debt and
guarantee commitments, higher than for many countries.
     REUTER
