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Davivienda Q1 profit up; Peru names new finance minister

* Colombia's Banco Davivienda SA reported net income of 454 billion pesos for the first quarter, 39.4% higher year over year from 326 billion pesos. Financial expenses for the bank were down 12.0% yearly to 890 billion pesos, from 1.011 trillion pesos previously. Provision expenses also fell 4.5% to 464 billion pesos.

* Former Peruvian Deputy Finance Minister Carlos Oliva has been sworn in as the country's new finance chief, succeeding David Tuesta who resigned earlier in the week, Reuters reported. Oliva is Peru's fifth finance minister in the past year, according to the report.

MEXICO AND CENTRAL AMERICA

* Mexico recorded inflation of 4.51% in May, down from 4.55% in the previous month, Reuters reported, citing the country's statistics agency.

* Crédito Real SAB de CV Sociedad Financiera de Objeto Múltiple ER said it repurchased 175,000 own shares at market price under a buyback program.

* State-run lenders Banco de Costa Rica, Banco Nacional de Costa Rica and Banco Popular y de Desarrollo Comunal SA named new officials this week, El Financiero reported. Shirley González Mora and Adriana Céspedes were appointed president and vice president at BCR, while Marcia Montes Cantillo, Rodolfo González Cuadra and Marvin Arias Aguilar joined Banco Nacional as board members. Banco Popular announced the appointment of Marvin Rodríguez as general manager and Juan Francisco Rodríguez Fernández as deputy general manager.

BRAZIL

* Brazil's central bank will auction up to $20 billion worth of currency swaps through the end of next week as market intervention against depreciation in its currency, and would continue to step into markets for "as long as needed," Reuters reported, citing Governor Ilan Goldfajn. Separately, President Michel Temer ruled out the risk of a currency crisis, and analysts also said long-term inflation expectations will probably not be affected by the depreciation, unless it falls to more than 4 reais to a dollar.

* Brazil's FGC deposit guarantee fund has paid 33.6 million reais in compensation to 8,379 former customers of Banco Neon SA a month since the bank was put into liquidation, Valor Econômico reported. It said that meant 83% of the bank's customers had received coverage for their deposits.

* B3 SA – Brasil, Bolsa, Balcão has formed an alliance with China Investment Information Services Ltd, a wholly-owned subsidiary of the Shanghai Stock Exchange, for the Chinese company to distribute B3 market data, Diário Comércio Indústria & Serviços reported, citing B3 CEO Gilson Finkelsztain.

ANDEAN

* Peru's central bank maintained its benchmark rate at 2.75% during its June 7 meeting, as inflation for the month of May grew 0.93% year over year below the lower end of the central bank's target range. The regulator forecasts inflation to return to the official target range in June and converge to 2.0% by year-end 2018.

* Peru's Congress failed to pass a bill to establish a regulatory framework for the country's hundreds of savings and loan cooperatives, and will resume discussions of the legislation again next week, El Comercio reported. The bill that was approved at the committee stage would give banking regulator SBS the power to enforce its rules and create a deposit guarantee fund. It would also involve the appointment by public tender of the official in charge of supervising the entities, a measure that SBS officials had opposed, Gestión reported separately.

* Fitch Ratings believes recent steps taken by Colombia toward gradually adopting Basel III requirements will lead to improved bank capital adequacy, which is a credit positive. Capitalization is one of the main credit weaknesses of Colombian banks, as current levels in the country fall short of its international peers, though Fitch expects the banks' capitalization to improve gradually.

* Colombia's Grupo Aval Acciones y Valores SA has opened a digital research center for developing new products as part of a digital transformation strategy at its Banco Comercial AV Villas SA, Banco de Occidente SA and Banco Popular SA units, El Tiempo reported, citing Ana Margarita Albir Sarmiento, leader of Aval Digital Labs.

* Banco Bilbao Vizcaya Argentaria Colombia SA posted first-quarter net profit of 160.66 billion pesos, up 39% year on year from 115.41 billion pesos. Net interest income increased 15.0% year-over-year to 655.7 billion pesos, while the gross margin rose 6.1% to 818.08 billion pesos.

SOUTHERN CONE

* Argentina and the International Monetary Fund have agreed to a three-year $50-billion standby arrangement to strengthen the Latin American country's economy, subject to approval by the IMF's executive board. The Argentinian government said it will draw on the first tranche of the facility but will subsequently treat the loan as precautionary. The IMF also called on the country's central bank to immediately end financing the federal deficit.

* Argentina's CNV securities regulator will give approval in the coming weeks to a closed digital investment fund aimed at insurance companies, which are no longer allowed to invest in short-term Lebac paper issued by the central bank, El Cronista reported. It said the fund, which would provide financing to small and medium-companies, would be managed by Mercofond.

* Chile's Banco de Credito e Inversiones SA has filed an appeal at the country's constitutional tribunal that would allow it to resume business with public sector entities, Diario Financiero reported. The bank has been convicted of anti-trade union practices, meaning it cannot be contracted by the state.

PAN LATIN AMERICA

* Latin American neighbors Chile, Peru and Colombia have practiced improved fiscal discipline over the years, but still face challenges in fiscal consolidation given lower commodity prices and a slower growth trend, Fitch Ratings said. Fitch also noted that new presidential administrations in all three countries will test their adherence to their present fiscal rules.

* Corporate credit indicators across Latin America point to a positive trend for the region, Fitch Ratings said, with Brazil as the exception due to a highly volatile political environment, foreign exchange fluctuations, higher oil prices and slow economic recovery.

* M&A deals in Latin America totaled 124 in May 2018, up 4.53% from the same month a year ago, though amounts involved in the transactions fell 39.22% to about $7.54 billion, El Comercio reported, citing the latest report by Transactional Track Record consulting firm. In the first five months of 2018, there were 751 transactions, down 14.56% year-over-year though the sums registered rose 33.37%.

IN OTHER PARTS OF THE WORLD

* Europe: Lloyds exits Standard Life Aberdeen; Deutsche Bank to sell $3B energy loans

Helen Popper contributed to this article.

The Daily Dose has an editorial deadline of 8:00 a.m. São Paulo time, and scans news sources published in English, Portuguese and Spanish. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.