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Argentina currency controls create index risks; Caixa's Q2 profit jumps 21.6%

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Argentina currency controls create index risks; Caixa's Q2 profit jumps 21.6%

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

Buy and sell

* Brazilian antitrust regulator Cade approved Itaú Unibanco Holding SA's minority investment in Ticket Serviços SA, allowing the bank to purchase an 11% stake in Ticket Serviços.

* BTG Pactual Chile SA Compania de Seguros de Vida said shareholders BTG Pactual Chile SpA and BTG Pactual Chile Servicios Financieros SA agreed to sell 100% of the company's share capital for 1.8 million unidad de fomento, which is Chile's inflation-indexed unit.

* Panama's Banco Aliado SA completed its purchase of Banco Panamá SA after garnering approval from banking regulator SMV.

IPO talks

* Caixa Econômica Federal CEO Pedro Guimarães said the state-owned bank plans to go ahead with an initial public offering for its insurance arm, Caixa Seguridade Participações SA, in 2019 despite regulatory hurdles. The IPO of card unit Caixa Cartões will be delayed until 2020, however.

* Banco Original SA is reportedly in talks with investment banks to coordinate a potential initial public offering. Sources told Valor Econômico that the Brazilian lender is working at a "very fast" pace to set the offering up.

Monetary easing

* Banco Central de la República Dominicana cut its monetary policy interest rate by another 25 basis points to 4.50% as inflation remained below the central bank's target range.

* Banco Central de Chile revised down its economic growth forecast for 2019 to between 2.25% and 2.75% from a previous range of 2.75% to 3.5%. The central bank also cut its monetary policy rate by 50 basis points to 2.0% and signaled that it could ease policy further amid worsening economic and political conditions abroad.

In other news

* Caixa Econômica Federal's second-quarter net income rose 21.6% from a year earlier to 4.21 billion Brazilian reais, driven by a substantial increase in income from financial intermediation.

* Mastercard Inc. discontinued its credit card services for two state-owned Venezuelan banks, Banco Agrícola de Venezuela and The Bank of the Armed Forces, in line with U.S.-imposed sanctions against the government of President Nicolás Maduro.

* Brazil's Banco BS2 SA is set to launch digital banking services focused on small and medium-sized enterprises.

* Banco Supervielle SA received a three-year credit line of $80.0 million from Dutch bank Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden NV and Proparco, a subsidiary of France's Agence Française de Développement.

* Argentina's government reintroduced capital controls to help stem the peso's decline, requiring companies and individuals to seek central bank approval for foreign currency purchases. The move puts the country at risk of losing its emerging-market status with index provider MSCI, and could affect an upcoming reclassification decision at FTSE Russell.

Featured this week on Market Intelligence

* Argentine banks better prepared than in 2001, but profit concerns remain: Compared to 2001, Argentine banks are better prepared to face the country's new economic meltdown, but with a new government expected to take power soon, questions remain as to how the sector will be able to continue its current model of investing in central bank securities.

* 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.