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Itaú-XP deal under scrutiny; Argentine central bank chief departs

Deal hurdles

* Banco Central do Brasil reportedly is looking to impose changes on Itaú Unibanco Holding SA's stake purchase of brokerage firm XP Investimentos SA before granting its approval. The central bank purportedly wants the size of Itaú's stake in XP Investimentos to come in below the 49.9% it originally planned, as this would effectively preserve the independence of the brokerage firm. Other proposals include removing the sale and purchase options from the agreement regarding the company's controlling stake.

* Chile's financial market commission, CMF, approved Bank of Nova Scotia's takeover of BBVA Seguros de Vida SA as part of the bank's pending purchase of Banco Bilbao Vizcaya Argentaria SA's stake in Banco Bilbao Vizcaya Argentaria Chile SA. The deal already clinched approvals from Chilean competition watchdog FNE and other regulators in Chile and Canada.

* BBVA Banco Francés SA is considered the front-runner to acquire Chilean retailer Cencosud SA's credit card operations in Argentina. Goldman Sachs, which has been tasked with selling the Cencosud portfolio, reportedly put a $180 million price tag on the deal.

Crime and punishment

* Brazil's antitrust regulator Cade fined Morgan Stanley and Royal Bank of Canada a total of 42.9 million reais for participating in an alleged offshore foreign exchange market cartel. The banks are being investigated for allegedly meddling in exchange rates involving foreign currencies and the real.

* The virus attack at Banco de Chile in May resulted in the theft of some $10 million, CEO Eduardo Ebensperger said. Meanwhile, Finance Minister Felipe Larrain said the government and local banks will engage an unnamed international organization to provide advice on cybersecurity protocols following the cyberattack at Banco de Chile.

* Banco Bradesco SA claimed it has no knowledge of any investigation by the Brazilian central bank into an alleged fraudulent foreign exchange operation from 2010. Bradesco reportedly is among the banks involved in the conduct of fraudulent transactions with front companies worth $200 million.

* Argentina's Banco de Valores SA will bring its case regarding a 39 million-peso fine before the Supreme Court after a lower court rejected the bank's appeal earlier in June. The fine relates to a 2014 money laundering case involving the bank and its management.

* An appeals court found Banco Santander Chile guilty of violating data protection laws when it failed to properly dispose of documents containing clients' personal and financial information in 2015.

Notes from Argentina

* Argentina formally requested a $50 billion rescue package with the International Monetary Fund to help it revitalize its debt-laden economy. The economic plan contains "ambitious medium-term fiscal goals" and "realistic inflation targets," according to IMF Managing Director Christine Lagarde. The IMF's executive board will formally consider the request June 20.

* Fitch Ratings expects Argentina's standby arrangement with the IMF to help alleviate the sovereign's financing risks, especially amid weaker market confidence. Fitch forecasts inflation to grow to 27.5% by year-end 2018. The rating agency also lowered its GDP growth forecast for 2018 to 1.3% from 2.6% previously.

* The head of Banco Central de la República Argentina, Federico Sturzenegger, stepped down in what could be the first of several central bank departures. Finance Minister Luis Caputo will take over as president of the central bank. Sturzenegger's resignation followed a report claiming that a number of central bank directors could leave, spurring the Argentine peso to slump during June 14 trading. The Argentine government also announced plans to combine its finance ministry with the treasury ministry.

* Meanwhile, new data showed that Argentina's inflation rate reached 2.1% in May, below the 2.5% estimate from analysts polled by Reuters.

Featured this week on S&P Global 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.