	chemical chl net hurt by brazil expenses chemical new york corp said its first quarter profits fell by pct largely because it placed billion dlrs of loans to brazil on non accrual chemical reported first quarter net income of mln dlrs down from mln a year earlier but declaring the brazilian loans non performing cost chemical mln dlrs in lost interest income or mln dlrs after tax a pct jump in non interest expense to mln dlrs from mln also hit the bottom line it said the rise was mainly due to staff costs associated with continued growth in consumer capital markets and investment banking activities excluding the effect of placing brazil on non accrual chemical said its net income would have been mln dlrs or pct below ings brazil suspended interest payments on billion dlrs of medium and long term debt on february if they are not resumed by year s end chemical said its after tax net for the whole of will be reduced by about mln dlrs chemical also placed mln dlrs of loans to ecuador on non accrual because the quito government also suspended interest payments on its foreign debt this reduced interest income by mln dlrs chemical said net interest income fell to mln dlrs from mln and its net spread narrowed to pct from pct this reflected the reclassification of brazilian loans a reduced federal income tax rate which affected the calculation of the taxabale equivalent adjustment on tax exempt assets and a narrowing of the spread between the prime rate and chemical s cost of funds foreign exchange trading profits rose to mln dlrs from mln but bond trading profits dropped to mln dlrs from mln fees from trust and other banking services rose to mln dlrs from mln a year earlier chemical said the provision for loan losses was mln dlrs compared with mln net loan charge offs were mln up from mln leaving the allowance for loan losses at mln dlrs at quarter s end or pct of loans outstanding compared with mln or pct a year earlier non accruing loans at the end of march were billion dlrs billion excluding brazil compared with billion at the end of and billion at the end of march reuter 
