March 11 (Bloomberg) -- Banco do Brasil SA fell after two judges from Brazil’s Supreme Court said they didn’t get a settlement proposal from banks in a lawsuit that may cost them as much as $144 billion.
Shares dropped 0.9 percent to 19.53 reais at the close in Sao Paulo. The stock rose as much as 2.3 percent earlier today after Valor Economico reported that the lenders, accused of underpaying interest on inflation-linked deposits in the 1980s and 1990s, were trying to persuade the Supreme Court to limit payments to be made in the case. The newspaper didn’t say where it got the information.
Lenders presented arguments to limit losses should the court rule in favor of savings-account holders, Judges Ricardo Lewandowski and Jose Antonio Dias Toffoli told reporters in Brasilia today. The central bank estimated last month that a ruling against the banks may reach 341.5 billion reais ($144 billion).
Depositors are claiming losses stemming from measures imposed by the government to fight hyperinflation from 1986 to 1994, when the nation froze bank deposits, introduced new currency and reduced returns on savings accounts. Banks including Banco do Brasil have said that they complied with the law that was in effect at the time and shouldn’t be penalized.
The Supreme Court hasn’t yet set a date for ruling on the case. Brazil’s bank association, Febraban, declined to comment on Valor’s report when contacted by Bloomberg News.
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