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Banco Frances reports net loss; Mexico, Peru maintain benchmark rates

* BBVA Banco Francés SA posted a net loss of 283.0 million Argentine pesos for the second quarter of 2017, compared to a net income of 963.3 million pesos earned in the second quarter of 2016. While the bank earned about 1.19 billion pesos net in the first quarter due to lower income tax, the Argentine central bank required Banco Frances to record a provision for possible contingencies in the same amount.

* Banco de México unanimously voted to maintain its benchmark interest rate at 7%, saying inflation "seems to be nearing to a peak," The Wall Street Journal reported.

* Banco Central de Reserva del Perú also decided to keep its benchmark interest rate at 3.75% as inflation remained within the target range. Inflation rose to 2.85% year over year in July from 2.73% in June.


* Tighter liquidity conditions in Costa Rica are adding up to the country's fiscal problems, Fitch Ratings said. Government debt grew to 45% of GDP in 2016 from 24% in 2008, due to higher structural spending and institutional gridlock disabling the ability to raise taxes for spending. Also, a rapid depreciation in the Costa Rican colon has led to a central bank rate hike and a selloff of U.S. dollar reserves.

* Fitch Ratings placed the AA+(nic) long- and F1+(nic) short-term national ratings of Nicaragua-based Banco ProCredit SA on Rating Watch Negative following its recent acquisition by Corporación Financiera de Inversiones. Banco ProCredit's ratings were based on support from its former parent ProCredit Holding, and the bank stopped depending on that support when the acquisition closed, Fitch said.

* In an Aug. 10 auction, Banco de México successfully placed all its hedge instruments worth $200 million, receiving $1.27 billion in bids for the renewal of those debt instruments, Reuters reported.

* Costa Rica's IMAE economic activity index rose 4.2% in June year on year, a swifter rate than during previous months, El Financiero reported, citing official data. The central bank recently cut its outlook for 2017 economic growth to 3.8% from 4.1% previously.

* Credit card use in Mexico has rebounded from a decline in 2014 and 2015, with the total credit portfolio rising 10% to 364 billion pesos in June 2017 year on year, El Economista wrote, citing the CNBV banking and securities regulator.


* Credit recovery in Brazil for the period from January through July declined 1.8% compared to the year-ago period, while credit recovery for July alone was down 6.0% from the same month a year earlier, according to data from research credit firm Boa Vista SCPC. The research firm noted that while scenarios differ across regions, there is an average downward trend for Brazil's credit recovery.

* Banco do Brasil SA posted a 7.2% rise in second-quarter net profit of 2.62 billion reais, and a 47.1% annual rise in adjusted net income of 2.65 billion reais for the same quarter. The bank attributed the year-over-year increase to a 7.3% rise in fee income to 6.32 billion reais, and a 19.6% annual drop in provision expenses to 6.66 billion reais.

* Banco Votorantim SA posted net income of 145 million reais for the second quarter of 2017, up 34.3% from the 108 million reais earned a year earlier. The rise came with a 30.0% annual rise in income from services and banking fees to 326 million reais. Personnel and administrative expenses also fell slightly to 612 million reais from 646 million reais a year earlier, while allowance for loan losses fell 15.8% annually to 385 million reais in the quarter.

* Banestes SA - Banco do Estado do Espírito Santo, together with 11 other institutions, received accreditation as open market dealers from Banco Central do Brasil, allowing them to perform operations with government bonds. The valuation period starts Aug. 10 and ends Jan. 31, 2018, according to the central bank.

* Brazil will likely revise its primary deficit target for both 2017 and 2018 to 159 billion reais each, from the current deficit targets of 139 billion reais and 129 billion reais, Reuters reported, citing government sources "who requested anonymity." The new budget will be unveiled Aug. 14, Reuters wrote separately.

* Banco do Brasil SA plans to launch an investment platform open to non-clients, a first step by the bank to compete with independent brokerages such as XP Investimentos, Folha de S. Paulo reported, citing comments by CEO Paulo Caffarelli during the presentation of the bank's second-quarter earnings.

* Caixa Econômica Federal CEO Gilberto Occhi said a new remuneration system for the workers' severance fund, or FGTS, would raise the yield of FGTS accounts in 2017 to 7.14% from 5.11%, Reuters reported.

* Banco do Brasil SA CEO Paulo Caffarelli said Brazilian banks and credit markets will be able to meet companies' credit needs as the country's economic recovery gathers pace, Valor Econômico reported. He added that the bank's loan portfolio should include smaller companies and agricultural enterprises, Valor reported separately.

* Mauricio Costa de Moura and Paulo Sérgio Neves de Souza have been appointed directors at Brazil's central bank, according to a presidential order published in the Federal Official Gazette.


* Pablo Beltran, chief negotiator for Colombia's ELN rebel group, said the group is considering a unilateral ceasefire declaration upon Pope Francis' visit to the country in September, Reuters reported.

* Peruvian Foreign Minister Ricardo Luna warned that Venezuela may devolve into civil war if the political and economic situation in the country worsens, Reuters reported. For Peru's part, Luna noted the country may see a mass influx of refugees from Venezuela.

* Pablo de la Flor, the head of Peru's reconstruction authority, said the government is readying to auction $6.15 billion in reconstruction contracts through 2021, in the aftermath of recent flooding that damaged infrastructure, Reuters reported.

* Venezuelan President Nicolas Maduro addressed the newly inaugurated constituent assembly for the first time and called it strongest body in the country, Reuters reported. Maduro acknowledged "its plenipotentiary powers, sovereign, original and magnificent."

* Four U.S. senators called on U.S. President Donald Trump not to block oil shipments from Venezuela, as doing so could hurt the economy and people of both countries, Reuters reported.

* In an internal memo, Credit Suisse Group AG has tasked its Reputational Risk Office to stringently evaluate, and block if needed, any upcoming transactions involving Venezuelan bonds or business with the government or related entities, Reuters reported. Credit Suisse clients who already hold Venezuelan securities will be unaffected by the new measure. "In light of the political climate and recent events in Venezuela ... we want to ensure that Credit Suisse does not provide the means for anyone to violate the human rights of the Venezuelan people," the company memo reportedly said.

* Peru's Congress passed a bill to raise the country's fiscal deficit to 3% of GDP this year from 2.5% previously and to 3.5% from 2.3% for 2018 to reflect the cost of reconstruction linked to devastating El Niño floods earlier in 2017, Gestión reported.

* Banks have been the biggest buyers of government debt in Colombia in recent weeks, increasing their holdings of TES paper, or bonds from the Colombian treasury, by 3.1 trillion Colombian pesos to 38.1 trillion pesos in July alone, Portafolio reported, citing Finance Ministry data. Local banks currently account for 15.46% of government debt holdings, still less than foreign investors and pension funds.


* Argentine banks have opened around 800 deposit accounts for minors since the central bank issued new regulations earlier this year, La Nación reported. Banco de la Nación Argentina, Banco de la Provincia de Buenos Aires and Banco Credicoop Cooperativo Limitado have launched accounts for those below 18, while Banco Macro SA, Banco de Galicia y Buenos Aires SA and Banco de la Ciudad de Buenos Aires plan to offer the product in the coming months.

* Banco Central de la República Argentina has sold $1.6 billion in foreign reserves in a bid to prop up the peso, which has been hit by pre-election jitters, El Cronista reported. The peso closed Aug. 10 at 17.98 pesos per dollar, falling below 18 pesos after the monetary authority intervened by selling $298 million. The central bank is also continuing to offer short-term Lebac paper to withdraw pesos from the market.

* Banco Hipotecario del Uruguay has been granted two loans totaling $50 million by the Banco De Desarrollo De América Latina, El Pais reported. The credit will be used to finance mortgages denominated in local currency.

* Chile's government development agency Corfo and Banco del Estado de Chile have collaborated to grant small and medium-sized companies access to financial products and services at preferential rates, mainly for working capital and investment loans, La Tercera reported.

* Chile's economy is expected to grow by 1.4% for 2017, compared with the previous growth forecast of 1.5%, Pulso reported, citing the Banco Central de Chile's latest monthly Economic Expectations Survey. The poll also showed analysts expect a further cut in the central bank's benchmark TPM rate, expecting it to reach 2.25% in September.


* Kristin Ceva, a portfolio manager at investment managing company Payden & Rygel Investment Counsel, said there is high-value debt from the Dominican Republic, Jamaica, Honduras and Costa Rica, Bloomberg News reported. Ceva said the countries carry positive economic outlooks and benefit from lower oil prices. They also see faster growth and benefit from more stable political scenarios than Brazil and Mexico.


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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.