FleetBoston may commit less capital to its Brazilian operations

FleetBoston Financial Corp., which wrote off more than $1 billion in loans and bonds in Argentina last year, may commit less capital to its Brazilian operations, its chief executive officer said.


“I’m sobered by Argentina,” CEO Chad Gifford told investors at a Credit Suisse First Boston financial services conference in Dana Point, Calif. “We’re looking and wondering at the contagion.”


FleetBoston is contemplating paring back in Brazil even amid a 49 percent return on equity and a 10 percent increase in profit there in the fourth quarter. The recession in Argentina, where more borrowers can’t pay back their loans and the government has defaulted on most of its $141 billion in debt, contributed to a fourth-quarter loss of $507 million.


Gifford said the bank is in the middle of examining whether it will lower “capital at risk” in Brazil, which has contributed the most consistent earnings per share growth for the bank over the last decade.



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