MORGAN <JPM> PLACES BRAZIL LOANS ON NONACCRUAL
J.P. Morgan and Co Inc, parent of
Morgan Guaranty Trust Co of New York, said that it will place
1.3 billion dlrs of medium- and long-term loans to Brazil on a
non-accrual basis, matching similar action by BankAmerica Corp
<BAC> earlier today.
    The move, which follows Brazil's suspension of interest
payments on 68 billion dlrs of commercial bank debt on February
20, is expected to reduce first quarter net income by about 20
mln dlrs, of which four mln dlrs represents interest accrued
prior to 1987 but still uncollected, the bank said.
    Morgan earned 233.9 mln dlrs in the first quarter of 1986.
    Morgan also said that, based on current interest rates and
assuming cash interest payments are not received for the rest
of the year, 1987 net income would be reduced by about 72 mln
dlrs. 1986 net income was 872.5 mln dlrs.
    Although U.S. banks do not have to put loans on nonaccrual
until they are over 90 days past due, Morgan said some of the
loans affected by the Brazil payment freeze may reach the
90-day limit during the second and third quarters.
    Morgan said it assumes talks between Brazil and commercial
bank lenders will proceed "expeditiously" and interest payments
will resume at the earliest practicable date.
 Reuter
