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Credit prospects; central bank moves

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Credit prospects; central bank moves

S&P Global Market Intelligence presents the week's latest news and trends in Latin American banking.

Credit prospects

* Consumer credit demand in Brazil increased 1.4% in November compared to a year earlier and rose 1.3% from the previous month, said credit research firm Serasa Experian.

* Credit recovery in Brazil for the period from January through November declined 1.5% compared to the year-ago period, according to credit research firm Boa Vista SCPC.

* Banco Bradesco SA expects growth in its corporate credit portfolio to pick up in 2018, partially thanks to the passage of pension reform in Brazil.

* Banco de Inversión y Comercio Exterior SA plans to more than double its loan disbursements in 2018, with the vast majority of those funds headed to small and medium-sized enterprises.

* Peru's central bank foresees the country's financial sector delinquency rate rising to 5.1% by September 2018 from 4.8% as of September 2017 amid an economic slowdown.

Central bank moves

* Banco de México raised its benchmark borrowing rate by 25 basis points to 7.25% following a recent increase in inflation.

* Banco Central de Reserva del Perú maintained its monetary policy interest rate at 3.25%, citing decreasing inflation and faster national and global economic growth.

* Banco de Chile decided to keep its benchmark interest rate steady at 2.5%.

* Colombia's Banco de la República maintained its benchmark rate at 4.75% as Colombia's economic growth remained weak while inflation stayed above the central bank's target.

* Banco Central de la República Argentina maintained its monetary policy rate at 28.75% as inflation expectations remained high.

Deal buzz

* Banco do Brasil SA CEO Paulo Caffarelli said the bank does not need to sell its stake in Argentina-based Banco Patagonia SA and instead will make a follow-on offering at "the best moment" on the Argentine stock market.

* EFG International AG has now also completed the migration onto its groupwide IT platform of the remaining Swiss businesses in Ticino of BSI SA, which it acquired from BTG Pactual Group.

* Argentine banks want a noncompete clause included in the sale contract of their jointly owned card business Prisma Medios de Pago SA.

Legal disputes

* The attorney general's office of Brazil announced an agreement under which large local banks will compensate depositors who suffered losses as a result of government economic plans in the 1980s and 1990s.

* Citibank - Colombia SA said the country's state council has revised the fine from a 2014 ruling against the bank for a 2006 tax reporting issue.

In other news

* All seven of Mexico's systemically important banks are in compliance with the country's minimum capital ratio levels, the national banking and securities commission, CNBV, said.

* The Bahamas central bank said it is creating a permanent anti-money laundering analytics unit in its bank supervision department in response to a national risk assessment that identified a number of threats related to money laundering and terrorist financing.

* CNBV authorized Banco Shinhan de México, a subsidiary of South Korea's Shinhan Bank Co. Ltd., to start operating in Mexico.

* Proposed changes to Brazil's credit guarantee fund FGC, which financially covers bondholders in the case of a financial institution's failure, include a ceiling of 1 million Brazilian reais for the amount it will guarantee per investor, Valor Econômico reported.

* A new Brazilian bank resolution law could reduce sovereign support for banks and, in turn, affect their issuer default ratings, Fitch Ratings said.

* Moody's has a stable outlook for Latin American banks, reflecting an expected improvement in the region's economic growth that will stabilize operating environments for lenders.

Featured this week on S&P Global Market Intelligence

* Hires and Fires: A weekly rundown of executive management, board and other personnel moves at Latin American financial institutions.

* Ratings Roundup: A summary of various ratings actions on Latin American financial institutions and economies.