U.S. banks stand to benefit from the economic turbulence in Brazil, according to major banks operating there.

"We don't believe we will be negatively affected, and this could well mean increased opportunities for us," said Brian D. O'Neill, managing director and head of Latin American operations for Chase Manhattan Corp.

Mr. O'Neill cited corporate finance, capital markets, mergers and acquisitions, and privatizations as among the sectors where Chase stands to gain business as a result of economic volatility.

In a similar vein, BankBoston Corp., the U.S. bank with the most extensive Brazil operations - nearly $7 billion of cross-border and local assets-said in a statement earlier last week that it was prepared to "take advantage of market turbulence" in Brazil.

"We remain confident in our near-term performance in Brazil, and our outlook for the remainder of the year continues to be positive," the bank added.

On Friday, Brazil allowed its currency to float after declining to use central bank reserves to offset pressure caused by a heavy capital flight out of the country.

Though stock markets have reacted negatively to the Brazilian crisis and sent share prices of major banks crashing, most big U.S. banks-including BankBoston, Chase, J.P. Morgan & Co., and BankAmerica Corp.-have dramatically decreased their lending to Brazil over the last few quarters, reducing exposure to economic volatility in that country.

U.S. banks had a combined $25.6 billion in exposure to Brazil at the end of the second quarter last year, down from $27.2 billion at the end of the first quarter.

However, major banks have continued to cut their exposure to Brazil since then.

Chase, for example, reduced its Brazilian exposure to $3.8 billion at the end of the third quarter, down from $4.3 billion at the end of the second quarter and $4.9 billion at the end of 1997.

BankAmerica Corp. had $3.3 billion in exposure to Brazil at the end of the third quarter, down from $3.9 billion three months earlier, while J.P. Morgan reduced its exposure from $4 billion to $2.2 billion. Executives at Citigroup, which had $4.5 billion in disclosed exposure at the end of the second quarter, were unavailable for comment.

"If we had anything material to announce we would have announced it," said a Citigroup spokesman.

On Friday the Brazilian real plunged 11%, to 1.48 to the dollar, down 18% since the start of this year, after the government decided to let the currency float.

Brazil's stock market, however, reacted positively to the decision, rising 28%. Local interest rates also fell significantly, easing pressure on the local economy.

Bankers and analysts reacted with cautious optimism to the Brazilian government's move. But they also emphasized that unless Brazil moves soon to reduce its budget deficit, the real could decline further against the dollar, force interest rates back up, and trigger a further slowdown in the local economy.

"We could see a further deterioration if there is no follow-up in the fiscal process," said David Sekiguchi, vice president for emerging market research at J.P. Morgan & Co.

Bankers predicted that the severe fall in the real will have an immediate effect on Argentina, which sends about a third of its exports to Brazil, but should not affect Brazil's ability to repay its foreign borrowings or trigger a chain reaction across Latin America.

"I'm not a big believer this is going to have a lot of collateral damage on other Latin American countries," Mr. O'Neill said.

"It won't be good for Argentina, but it won't have the same effect it had in Asia, where the crisis tore around, hitting one country after the other."

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