	canada banks could see pressure on brazil loans canada s major banks will likely face stiff pressure to declare their brazilian loans non performing if as expected major u s banks take similar action after the end of their first quarter tomorrow analysts said american bankers said last week that slow progress in debt talks with brazil increased the likelihood that u s banks would soon declare their brazilian loans non performing such action would put a lot of pressure on the canadian banks to do the same levesque beaubien inc toronto based bank analyst donna pulcine told reuters they banks like to appear to be conservative said pulcine and if a major bank puts loans on a non performing basis and the canadian banks don t there is going to be a lot of pressure from shareholders as to why one bank is considering the loans non performing and another bank is not wood gundy inc bank analyst patricia meredith said any willingness by a major brazilian bank creditor such as citicorp cci to declare its brazilian loans non performing rather than let brazil dictate settlement terms would provide a compelling example for other creditor banks in order to make that strategy work they citicorp have to have the support of the other banks said meredith bank analyst michael walsh at first marathon securities ltd said at least one canadian bank which he declined to identify wants to put the brazilian loans on a non performing basis and is trying to encourage the others to take that position canadian banks are owed about seven billion canadian dlrs by brazil which late last month suspended interest payments on its billion u s dlr foreign bank debt banks in canada although allowed to wait up to days before declaring loans on which they are receiving no interest as non performing usually move on such loans within days they could therefore delay action on the brazilian loans until late may which falls in canadian banks third quarter ending july bank of montreal brazil s largest canadian bank creditor said last week it was not currently considering declaring its billion dlrs of brazilian loans as non performing i think that is just for the benefit of the public walsh said of bank of montreal s statement some analysts predicted minimal ings impact on canadian banks from a move to declare the brazilian loans non performing they said brazil would likely resume interest payments by the banks fiscal year end on october thus allowing banks to recoup their lost interest income from what brazil has said it is quite likely the banks will get the money said meredith my outlook at this point is optimistic that there will be no adjustment for the full year s ings meredith forecast fully diluted per share ings of dlrs for royal bank of canada compared with in dlrs for bank of montreal compared with dlrs for canadian imperial bank of commerce compared with dlrs for bank of nova scotia compared with and dlrs for toronto dominion bank against she forecast dlrs for national bank of canada against dlrs before a two for one stock split analyst pulcine said she might lower full year ings estimates for the banks by between two cts and cts a share assuming a possible settlement reduced brazil s interest costs if the banks didn t receive anything for the rest of the fiscal year the impact could range from cts to cts a share but i don t see that as a likely scenario pulcine said walsh at first marathon suggested however that the brazilian debt situation was so complex that it could drag on beyond one full fiscal year he said he foresaw having to lower his fiscal ings forecasts for the banks he estimated that brazil s yearly interest payments to canadian banks totaled about mln dlrs or about pct of their total pre tax ings reuter 
