March 26, 2014 / 5:41 PM / 4 years ago

STXNEWS LATAM-Brazil court delays hearing on savings case to April 23

Brazil’s second-highest court on Wednesday delayed ruling on a landmark case dating back two decades that could significantly reduce the capital of the country’s biggest banks and further trip up a flagging economy. The Supreme Court of Justice, known as STJ, pushed back to April 23 a hearing on the scope and time frame of lawsuits claiming that banks failed to pay fair interest on deposits between 1987 and 1992, when hyperinflation led the government to peg remuneration on deposits to a number of consumer price indexes. The court had been scheduled to discuss on Wednesday for which time period the additional interest should be calculated, an issue crucial to estimating potential losses.

Brazilian bank stocks rallied on Wednesday, with Itaú Unibanco Holding SA, the nation’s largest lender by market value, jumping 2 percent. State-run Banco do Brasil SA , which analysts said would be the most affected in the event of a ruling favoring depositors, surged 1.8 percent.

Banks could pay up to 341 billion reais ($148 billion) in compensation if Brazil’s highest court, the Supreme Federal Court (STF), ultimately rules against them, banking industry group Febraban said at the start of the year. Discussions at the STJ precede hearings at the STF, which in November delayed a ruling on the constitutionality of the case. The STF is tasked with assessing the constitutional issues and determining whether banks will have to pay compensation.

$1 = 2.31 Brazilian reais

0 : 0
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