BOSTON, JUNE 3 -- New England's largest bank, Bank of Boston Corp., announced today it will post losses of up to $85 million for its second quarter due to the transfer of $300 million into its reserve to cover loans to Latin American countries.

Ira Stepanian, bank president and chief executive officer, cited debt renegotiations with Latin American countries, poor worldwide economic conditions and potential defaults by those nations as reasons for the transfer. The countries include Argentina, Brazil, Mexico, Chile and Venezuela, said a bank officer.

The company -- which ranks as the nation's 14th-largest bank -- is following a trend set by New York-based Citicorp and followed by several other banks in increasing its reserve to cover possibly uncollectable foreign loans.

The transfer of funds to the reserve, approved today by the bank's board of directors, brings the total amount in the reserve to $700 million, said bank spokesman Alan McKinnon.

"We think it is a very adequate reserve," McKinnon said. "We think it gives us a tremendous amount of flexibility facing {loan} renegotiations."

The reserve now equals 36 percent of the corporation's approximately $1.2 billion in cross-border loans and leases to less developed nations. The reserve amount represents 1.25 percent of the bank's remaining loan and lease portfolio.

The bank's debt to less developed countries represents about 5 percent of the bank's total loans and leases, said Stepanian, who emphasized that the bank will continue to be supportive of developing nations and to aid them in building stronger economies.

The bank expects to make a profit by the end of the third quarter and also expects to show a profit at the end of the year, so its dividend rate will not change, he said.