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Itaú CorpBanca approves MCC acquisition; Mexican central bank cuts GDP forecast

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

Moving on M&A

* Itaú CorpBanca approved the acquisition of Munita Cruzat y Claro SA C de B, a brokerage and private banking unit, from Itaú Unibanco Holding SA, as agreed upon by the companies in 2014.

* Brazilian investment bank Banco BTG Pactual SA said it will transfer an approximate 25% stake in Switzerland-based EFG International AG to BTG Pactual Holding SA, in a corporate reorganization which will see the banking unit retain an approximate 5% stake. In addition, BTG will sell about 2 billion reais in shares in the banking unit, held by BTG Pactual Holding, in a secondary public offering.

* The Brazilian government reportedly offered its stake in IRB-Brasil Resseguros SA to Banco Bradesco SA and Itaú Unibanco Holding.

Regulatory road

* Banco de México lowered its 2019 economic growth forecast to between 0.8% and 1.8% after it reported a 0.2% contraction for the first quarter of the year.

* Banco Central do Brasil plans to implement a long-term reduction in the level of reserve requirements under its so-called BC# reform agenda.

* The Argentine central bank lowered its minimum reserve requirements for public banks on May 30, a measure expected to release 20 billion Argentine pesos in funding as of June.

* Brazilian central bank President Roberto Campos Neto said the entity would file a bill that will simplify laws on foreign exchange markets and make it easier to do business using the Brazilian real.

* After a three-year statistical blackout, Banco Central De Venezuela published several key economic indices that confirm the severe economic meltdown that had been anticipated by local and foreign institutions, and by the government's opposition.

* Members of the Chilean central bank's monetary policy board considered lowering the benchmark interest rate earlier this month, amid weak economic growth in the first quarter of 2019.

* The Mexican central bank's deputy governor, Gerardo Esquivel Hernández, voted against the statement issued by the entity where the body maintained the reference rate at 8.25%, due to its restrictive tone and its conclusion on the balance of risks for inflation.

Earnings reports

* Banco de Bogotá SA's attributable net income for the first quarter jumped 14.3% annually to 697.1 billion Colombian pesos.

* Banco del Estado de Chile's attributable profit for the first quarter fell 18.7% year over year to about 36.33 billion Chilean pesos.

Legal concerns

* Brazilian securities and exchange commission CVM has begun proceedings in the case involving Wesley and Joesley Batista for the alleged misuse of insider information in interest rate derivatives trading at Banco Original SA.

* A federal court in Brazil ordered the arrest of two branch managers of Banco Bradesco SA and a businessman over an alleged approximately 1 billion-real money laundering scheme.

Technological innovations

* Twenty-seven of Mexico's 51 operating banks will use the CoDi digital payments platform set up by Banco de México by the end of September, according to the president of the country's banking association.

* Chile's Banco de Credito e Inversiones SA signed an agreement with U.S.-based payment processor EVO Payments Inc. to develop a new payment processing business in the South American country.

In other news

* Banco BTG Pactual plans to accelerate its growth in retail banking with the launch of a digital platform catering to the segment, combining its investment, credit, checking account and insurance operations in one platform.

* Banco Santander SA's Group Executive Chairman Ana Botín said the lender will channel about 2.7 billion reais in investment funds this year to its Brazilian subsidiary, Banco Santander (Brasil) SA, as part of the Spain-based bank's digitalization process.

* Mexican banks recorded a 4.9% increase in their loan portfolios in April, amounting to 5.28 trillion Mexican pesos, data from the country's banking and securities commission CNBV showed.

* Banco Nacional de Desenvolvimento Econômico e Social repaid about 30 billion reais to the Brazilian treasury and plans to repay more later this year.

* Itaú Unibanco approved a new share buyback program for the repurchase of up to 15,000,000 common shares and 75,000,000 preferred shares. The lender also canceled a previous repurchase program it launched in December 2017.

* Argentine Banco Santander Río SA's Chairman Enrique Cristofani said the bank will drop the 'Río' from its name and adopt the generic global name Santander, effective in the second half of July.

Featured this week on Market Intelligence

* 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.