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Itaú to appeal court rulings on taxes, unjust charges; S&P downgrades Barbados

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Itaú to appeal court rulings on taxes, unjust charges; S&P downgrades Barbados

* Itaú Unibanco Holding SA said it will appeal a decision by tax appeals board CARF that upheld a 2.7 billion reais tax assessment on the bank tied to the 2008 merger between Itaú and Unibanco, Reuters reported. The bank also said that the risk of it losing another legal dispute was low following a court decision that ordered the bank to pay 7.6 billion reais in unjust charges to a company, Reuters reported. The bank said it will also appeal that ruling.

* S&P Global Ratings downgraded the long-term foreign currency sovereign issuer credit ratings on Barbados to SD, or selective default, from CCC+/C. The debt watcher said Barbados failed to make an interest payment due on its 6.625% notes due 2035, a payment it does not expect the government to subsequently make, after Prime Minister Mia Mottley announced that the government was immediately suspending payments to external commercial creditors.

MEXICO AND CENTRAL AMERICA

* In a letter to Mexico's central bank, the country's Congress requested to know the causes and the extent of the attacks on Banco de México's interbank payment system, through which hackers are thought to have siphoned between 300 million and 400 million pesos, El Financiero reported. Meanwhile, customer complaints on failed bank transfers in Mexico surged in April and May during the time of the hacking, El Economista reported, citing data from the Condusef financial consumers' defense commission.

* Crédito Real SAB de CV Sociedad Financiera de Objeto Múltiple ER said it repurchased 250,000 own shares at market price under a stock buyback program.

* Bank of Nova Scotia has consolidated its operations in Panama, under which its units in the country will now operate under the brand SCOTIABANK, in a statement posted on Twitter. Banking regulator SBP also approved the voluntary liquidation of Scotiabank (Panamá) SA, commercially known as Scotiabank Transformándose, as part of the consolidation process.

BRAZIL

* BRB-Banco de Brasília SA on June 13 will pay interest on own capital, related to the first half of 2018, worth about 21.4 million reais. Shareholders of record as of May 30 will be entitled to the payment.

* Brazilian savings accounts received net inflows of about 2.41 billion reais in May, the third consecutive month of net deposits, Diário Comércio Indústria & Serviços reported.

* Brazil's Federal Supreme Court has maintained the constitutionality of a law that raised the Cofin social security tax paid by financial institutions including banks to 4% from 3% previously, Diário Comércio Indústria & Serviços reported. The appeal, which was rejected by 10 votes to 1, was filed by the Mercantil do Brasil brokerage firm.

* Brazil's central bank said it would not use monetary policy as an automatic response to the devaluation of the real against the dollar following market speculation that the benchmark Selic rate would be increased, Valor Econômico reported. Separately, the issuer said it had lost around 6.88 billion reais in foreign exchange swap operations during May, the biggest loss since January 2016.

ANDEAN

* Peru's deputy economy minister César Liendo resigned after nine months in the post, two days after David Tuesta quit as economy minister, Gestión reported.

* AVLA Peru Compañía de Seguros SA said it has registered a capital increase worth 3.8 million soles, through a private placement of 3,800,000 common shares. As a result, the company's capital stock increased to about 24.6 million soles from 20.8 million soles previously.

* Peru's SBS banking regulator has rejected a proposal by parliament's production committee to establish a new entity to supervise the country's savings and loans cooperatives and microfinance institutions, saying the measure would create more bureaucracy, El Comercio reported, citing deputy SBS head Óscar Basso. Sergio Espinosa, head of the SBS' Financial Intelligence Unit, said bringing the cooperatives under the banking regulator's control would protect members and allow the sector's sustainable growth.

* Espinosa also said that the entity is also working on legislation to regulate fintech companies and virtual currencies, SEMANAeconómica reported. He added, however, that the current priority was for Congress to pass a final beneficiary law that will establish the ultimate owners of all companies operating in the country in an effort to combat money laundering.

SOUTHERN CONE

* The International Monetary Fund is expected to sign a standby financing loan for Argentina on June 8, Clarín reported. It said the loan would likely be accompanied by announcements of additional credits from multilateral lenders that could reach $50 billion. Argentine central bank Governor Federico Sturzenegger also said that requirements for a credit line to the country from the IMF may include greater independence for the central bank, particularly in the framework for monetary policy, Reuters reported.

* Moody's analyst Valeria Azconegui said the rating agency expected an increase in default rates on Argentine mortgages and other loans in UVA inflation-adjusted units, El Cronista reported. She noted that while the UVA loans were adjusted for inflation on a monthly basis, most salaries were only adjusted once or twice a year, meaning borrowers could struggle to keep pace with repayment installments as high inflation persists.

* Bank of Nova Scotia's takeover bid to acquire up to 100% of the shares of Banco Bilbao Vizcaya Argentaria Chile SA is expected to start today and close on July 6, La Tercera reported, citing a bank statement. Scotiabank's Chilean unit said the takeover bid was open to all BBVA Chile shareholders and estimated the total value of BBVA's operations in the country at nearly $3.10 billion.

* Mario Farren, head of Chile's SBIF banking industry regulator, defended before a Senate committee the regulator's response to a computer virus attack at Banco de Chile in May that brought down the bank's branch, telephone banking and large payments systems, La Tercera reported. He revealed that the outage had forced the bank to use central bank systems for large transfers to other financial institutions by using information on a USB flash drive.

PAN LATIN AMERICA

* Fitch Ratings said that trade measures enacted in response to U.S. tariffs on steel and aluminum imports may not pose a major threat to global economic expansion unless the dispute worsens, given that U.S. imports of iron, steel and aluminum only make up 0.3% of the nation's economic output. However, Fitch noted "retaliatory actions could escalate trade tensions but the situation would need to deteriorate severely to have major ramifications for world GDP."

IN OTHER PARTS OF THE WORLD

* Asia-Pacific: UK fines Canara Bank; Malaysia may replace bourse CEO; Aussie lender defers IPO

* Middle East & Africa: Equity Group chairman retires; Kuwaiti creditor rejects Abraaj debt settlement

* Europe: UK suspends work on Solvency II fix; Italy to review coop banking reform

Helen Popper contributed to this article.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.

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.