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Banking Essentials Newsletter: 8th March Edition

Republic Bank Barbados closes Cayman National deal; Caixa to list 4 units

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

Buy and sell

* Republic Bank Trinidad & Tobago (Barbados) Ltd.'s tender offer to acquire up to 74.99% of Cayman National Corp. Ltd.'s ordinary shares expired March 8, with Cayman shareholders tendering 90.04% of the company's shares. A total of 38,133,434 Cayman National shares were tendered, but Republic Bank Barbados will acquire only 31,755,842 shares to stay within the acquisition range.

* FORUM Servicios Financieros SA, Banco Bilbao Vizcaya Argentaria SA's Chilean automobile financing business, detailed its 2018 financials in a corporate presentation to investors, a move seen as a key step for its planned sale. FORUM is the last of BBVA's business units in the country.

* Brazil's Caixa Participações SA is exercising its right to acquire 50% of the Banco Pan SA shares that were subscribed by Banco BTG Pactual SA in Banco Pan's previous capital hike of 400 million reais. Meanwhile, Caixa Econômica Federal still has longer-term plans to divest its stake in Banco Pan, despite having exercised a rights agreement that increased its ownership in the latter.

* Banco Santander (Brasil) SA will acquire a 40% stake in payroll lender Banco Olé Bonsucesso Consignado SA, giving it full control of the company.

Going public

* Brazil's Caixa Econômica Federal is looking to raise about 15 billion reais by listing four of its subsidiaries through the first half of 2020, CEO Pedro Guimarães said. Caixa is considering listing the subsidiaries, which include the bank's insurance, asset management, lottery and card businesses, in São Paulo and New York.

* Banco do Brasil SA President and CEO Rubem Novaes said it is not yet time to consider a sale or an IPO of the state-owned bank's fund manager, BB Gestão de Recursos-Distribuidora de Títulos e Valores Mobiliários SA. A private partnership to promote other businesses of BB DTVM, as the fund manager is known, or even a venture without a partner, would be the best way to proceed, Novaes reportedly said.

Court action

* Brazil's federal audit court TCU absolved former heads of Banco Central do Brasil and defunct bank FonteCindam for the damage caused by the central bank's intervention in the foreign exchange market in an attempt to bail out the bank during the 1999 currency crisis. The measure was justified due to the "systemic risk" in the financial system at the time.

* A Mexican collegiate court ruled that the country's banking and securities commission CNBV acted irregularly in administering a case concerning popular finance company Ficrea, which was accused of fraud by more than 6,800 people. The CNBV acted late in the Ficrea case despite knowing of the irregularities since 2011, the collegiate court said.

* The Supreme Court of Chile ruled that Banco de Chile has to return the money stolen in a cyberattack from the account of Comercial Agrícola e Industrial Novapro, La Tercera reported.

A new leaf

* BBVA Banco Francés SA, the Argentinian bank belonging to Spanish banking group Banco Bilbao Vizcaya Argentaria SA, is planning to rename itself BBVA as part of a global push by the bank to rebrand its global banking business. The unit said a global brand would allow the group to be more cost-efficient, create synergies, increase brand value, improve its digital reputation and help expansion into new markets and sectors.

* Banco Bradesco SA restructured its wholesale banking division by expanding its segmentation by customer business volume as it looks to improve profitability of operations with medium-sized and large companies.

The bottom line

* In Argentina, Banco Santander Río SA's fourth-quarter 2018 profit jumped 18% from a year earlier, while that of BBVA Banco Francés surged 120.2%.

* Colombia's Grupo Aval Acciones y Valores SA's fourth-quarter profit soared 82.3% year over year. Meanwhile, Banco Davivienda SA's net income for the quarter ticked 4.0% higher from a year ago.

In other news

* Banco Central de la República Argentina's move to raise its benchmark interest rate by about 1,000 basis points in recent days in an effort to stem currency depreciation is a credit negative for Argentine banks, Moody's said. Higher interest rates promote loan delinquencies, expand funding expenses and negatively impact economic activity and subsequently, banks' business projections, the rating agency noted.

* Brazil-based digital lender C6 Bank will open a brokerage in New York after obtaining a license from the U.S. Financial Industry Regulatory Authority.

Featured this week on Market Intelligence

* Mexico's rating agency uproar highlights conflicting signals for investors: In a speech marking his first 100 days in office, President Andrés Manuel López Obrador proclaimed Mexico's economy was "progressing" and that there are "no signs of a recession."

* 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.