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Itaú to close up to 400 branches in Brazil; PagSeguro launches digital bank

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

Digital innovations

* Itaú Unibanco Holding SA has reportedly initiated a plan to close up to 400 branches in Brazil until 2020 as it works to adjust to customers' growing preference for digital channels.

* Brazilian card processing company PagSeguro Digital Ltd. is launching PagBank, its digital bank business, to offer digital account and banking services through a smartphone app.

* Colombia's Banco Davivienda SA expects to fully digitalize its personal banking products and services by the end of 2019 and corporate banking services in the first half of 2020.

Legal concerns

* Hong Kong's High Court approved the pari-passu agreement reached between Banco de Chile and Maccaferri Inc., a construction company which allegedly fell prey to the same hackers who were behind the May 2018 cyberattack on the bank.

* Chile's Supreme Court ordered a labor court to decide on a minimum services claim between Banco Ripley SA and union representatives.

Earnings buzz

* Intercorp Financial Services Inc.'s net profit attributable to shareholders for the first quarter increased 21.6% year over year to 350.6 million Peruvian soles.

* Banco Santander Río SA's first-quarter results jumped 277% to 6.35 billion Argentine pesos.

* Banco do Estado do Rio Grande do Sul SA said its first-quarter net income rose 31.1% year over year to 320.0 million Brazilian reais.

M&A

* Jamaica's NCB Financial Group Ltd. completed its acquisition of shares in Guardian Holdings Ltd., which now holds nearly 62% of the shares in the Trinidad and Tobago-based company.

* The Brazilian government expressed concern about the slow pace at which Banco Nacional de Desenvolvimento Econômico e Social is planning to divest assets, Valor Econômico reported, citing several banking executives. Unlike other publicly owned institutions that have been following the government's guidelines in selling nonstrategic assets, BNDES has shown little initiative in this regard, the report said.

* Brazilian insurer Sul América SA bought 25% of the capital of digital investment platform Órama Distribuidora de Títulos e Valores Mobiliários SA for 100 million reais, raising Órama's valuation to 400 million reais. Icatu Seguros S.A. is also set to purchase Sul América's whole capitalization insurance business for an estimated 100 million reais.

* Banco BTG Pactual SA CFO João Dantas ruled out a sale of the bank's 29% stake in Switzerland-based EFG International AG.

Name changes

* BBVA Banco Continental SA changed its name to Banco BBVA Peru as part of parent company Banco Bilbao Vizcaya Argentaria SA's global brand unification initiative.

* Peru's rural savings bank Caja Rural de Ahorro y Crédito CAT Perú SA said it received approval from the country's financial superintendent to remove the "CAT Perú" abbreviation from its official name.

In other news

* Banco Central de Chile proposed to amend "reasonable deductions" in fraud claims against the country's banks as part of a controversial bill being debated in the Senate which reduces client responsibility in cases of online fraud.

* Itaú Unibanco Holding plans to transfer the headquarters of several of its subsidiaries to the city of São Paulo from the municipalities of Poá and Barueri. The move came as the company has reportedly been questioned by financial regulator CVM after newspaper reports indicated that Itaú had signed an agreement with the parliamentary investigation commission CPI over a tax case involving the transfer of addresses.

* The shares of some of the largest Argentine banks are set to benefit from the inclusion of select Argentine stocks into the MSCI Inc.'s Emerging Market Index as part of a national reclassification.

* State-owned Banco do Brasil SA does not plan to pass on proceeds from the divestitures of its assets to the government, CFO Carlos Hamilton Araújo said.

* Banking credit conditions in Latin America are expected to improve slightly in the second quarter after seeing further tightening in the first three months of the year, according to the Institute of International Finance.

* Brazil's Economy Minister Paulo Guedes again raised the possibility of a venture between Banco do Brasil SA and U.S.-based Bank of America Corp.

Featured this week on Market Intelligence

* Brazilian banking majors post 22.4% increase in combined Q1 profits: The combined first-quarter profit of Brazil's three largest listed banks grew 22.4% year over year as higher income from loans and other financial operations offset an increase in loan-loss provisions.

* Prisma divestment helps top Argentine banks nearly triple aggregate Q1 profit: The four largest listed banks in Argentina nearly tripled their aggregate first-quarter profit year over year as a government-mandated sale of shares in payment processor Prisma Medios de Pago SA yielded strong gains.

* Q1 profit for Chile's top 3 banks slips as asset write-downs, expenses rise: Chile's three largest banks recorded a combined net income of 346.03 billion Chilean pesos for the first quarter of 2019, a drop from 403.07 billion pesos earned in the year-ago period.

* MercadoLibre, the 'Amazon of LatAm,' grows rapidly into fintech: MercadoPago CEO Osvaldo Giménez sees significant opportunities for electronic payments growth in Latin America, where about half of the population is underbanked.

* 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.