NEW YORK (CNN/Money) - The fourth quarter earnings reports for many big banks are not going to be pretty.

FleetBoston Financial is the latest major bank to warn about a big credit-related charge, announcing on Friday that it would take an $800 million charge to account for losses in Argentina and bad loans related to the energy sector and a "bad airline bankruptcy." (Read: United). Fleet will report its earnings on January 16.

Last month, Bank of America said it was setting aside $1.2 billion for bad loans and Citigroup announced a $200 million charge for loan losses, in addition to a $1.3 billion charge related to the Wall Street conflict of interest settlement.

But the fourth quarter, which typically is a time for banks to do some balance sheet housecleaning, might not be the end of credit woes for the sector. Argentina remains a big problem in South America and there are concerns that troubles may spread in the region.

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"Brazil is still a big wild card," says David Hendler, an analyst with fixed income research firm CreditSights. Hendler says that if problems escalate in Brazil, Fleet could have to take an additional $500 million to $1 billion charge this year. He adds that Citigroup, J.P. Morgan, Bank of America and Comerica would also likely need to boost their loan loss reserves.

And banks may have to deal with more corporate bankruptcies as well, according to credit rating agency Standard & Poor's, which put Fleet's bonds on watch for a possible downgrade on Friday.

"Domestic asset quality continues as a question mark as the banking sector deals with a still-weak economic environment, highlighted by several troubled sectors, including but not limited to telecommunications, aviation, and energy," wrote S&P analyst John Bartko in a report. Two other credit rating agencies, Moody's and Fitch, affirmed their ratings on Fleet, however. Both noted that Fleet's retail banking franchise in the Northeast is performing strongly.

Hendler thinks that banks probably won't face too many more corporate credit problems but that losses from consumer loans such as credit cards could be a bigger problem in 2003. To that end, regional bank SunTrust announced a 9.5 percent increase in its loan loss provision from a year ago on Wednesday.

But is all this bad news already priced into bank stocks? Richard Bove, an analyst with Hoefer & Arnett, a boutique research firm, says that he thinks the larger banks like Fleet and Citigroup are now good values because they have been beaten down over the past year. Plus, even if consumer loan losses escalate, it should not have a huge impact on them.

Battered banks, high yields Large banks with credit problems have been punished, but they pay dividends. Company  Price change (past 12 months)  Dividend yield*  Bank of New York  -38.4%  2.8%  Citigroup  -20.6%  1.9%  FleetBoston Financial  -21.0%  5.1%  J.P. Morgan Chase  -29.5%  5.0%  Mellon Financial  -32.6%  1.9%   * As of 1/9/03  Source:  Baseline

Smaller regional banks, which have largely avoided the corporate credit related problems, would suffer more from a consumer credit crunch, Bove says. He thinks that President Bush's economic stimulus plan should help businesses in the short term (although not consumers). Plus, regional bank stocks have held up much better than their larger rivals.

As a result, Bove likes the larger banks with more corporate exposure. Bove does not own any of the stocks he follows and Hoefer & Arnett does not have an investment banking relationship with any of them either.

What's more, many of the big banks, including Fleet, have sizable dividend yields. Fleet's, for example, is 5.1 percent. Bove does not think that there is a major risk that either company will have to cut their dividends either.

Frank Barkocy, an analyst with Keefe Managers, a hedge fund that invests in financial services stocks, also thinks that most of the bigger banks are good bets now. He owns Citigroup and Fleet and thinks that the loan loss news from Fleet and other banks was not a huge surprise.

To wit, Fleet's stock fell only 0.4 percent on Friday and the shares of most other big banks were also relatively flat.

So even though the fourth quarter earnings reports are likely to be rife with ugly charges, it's unlikely that credit quality will get substantially worse. "We've seen the major car wrecks already," says Hendler.