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the loans by Bangkok Bank LA branch to Radcliffe85 afforded that
bank an opportunity to earn a profit. The record does not dis-
close the direct or indirect costs, including overhead, incurred
by Bangkok Bank LA branch with respect to the loans to Radcliffe.
No representative of Bangkok Bank LA branch or of other branches
of Bangkok Bank Ltd. testified, and none of the documents in the
record indicated, that the loan transactions at issue involving
Bangkok Bank LA branch gave that bank an opportunity to make a
profit.86
85 Those rates were (1) initially 1.5 percent and thereafter .75
percent in excess of Bangkok Bank LA branch's prime rate for BB
Loan No. 1 and (2) .5 percent in excess of the interest rates on
the respective certificates of deposit securing BB Loan No. 2 and
BB Loan No. 3. That the interest rate on BB Loan No. 1 was
determined by reference to Bangkok Bank LA branch's prime rate
does not, standing alone, establish that that loan afforded that
bank an opportunity to make a profit. In this connection, we
note that an officer of Union Bank stated in the Mar. 3, 1986
letter that that bank lost money on loans it had funded to
Radcliffe and to BOT that bore interest at rates that were equal
to stated percentages in excess of that bank's LIBOR or prime
rate.
86 Respondent suggests on brief that Bangkok Bank LA branch was
not making any profit on the spread between (1) the interest rate
on BB Loan No. 2 and on BB Loan No. 3 and (2) the interest rate
on the certificates of deposit that secured those loans. To
support that suggestion, she points to the Mar. 3, 1986 letter in
which an officer of Union Bank stated that Union Bank was losing
money on transactions with respect to which there was a 1.15
percent spread between (1) the interest rates on certain of Union
Bank's loans to Radcliffe and BOT (viz., the UB $1,300,000 loan
and the UB $1,830,000 loan) and (2) the interest rates on the
deposits in Union Bank that were pledged to secure those loans
(viz., the Pioneer $1,300,000 CD and the Mandalay $1,300,000 CD
in the case of the UB $1,300,000 loan and the Pempire $1,830,000
CD in the case of the UB $1,830,000 loan). We are not willing to
accept respondent's suggestion that we assume that Bangkok Bank
LA branch could not have made a profit on a .5 percent spread
(continued...)
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