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Court action; strategic planning

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Court action; strategic planning

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

Court action

* Geddel Viera Lima, a former Brazilian minister, and Eduardo Cunha, the country's former lower house speaker, allegedly conspired to extend subsidized Caixa Econômica Federal loans to a number of firms in return for bribes, Reuters reported, citing a search warrant issued as part of an investigation into a purported corruption scheme at the state-run bank. The loans were reportedly mostly granted with much lower interest rates than the market average.

* Banco Nacional de Desenvolvimento Econômico e Social's board is facing opposition to its proposed solution to a shortfall in the pension fund for its employees, known as Fapes. The association that represents the fund's participants reportedly will file a lawsuit to suspend the plan to address a so-called "actuarial deficit" of 2.5 billion Brazilian reais, claiming that it will increase the amount that retirees would have to contribute.

* A court based in the Brazilian state of Rio de Janeiro issued an injunction forcing Banco do Brasil SA to hand over the bulk of the judicial and administrative deposits it collects from state proceedings to the Rio government.

Strategic planning

* BBVA Bancomer SA Institución de Banca Múltiple Grupo Financiero BBVA Bancomer's business development chief Hugo Nájera Alva said the bank doesn't plan to close any of its Mexican branches, even though its Spanish parent company is doing so in an effort to cut costs.

* Banco Santander Río S.A. should be able to achieve its growth targets without significantly compromising its credit strengths, even with its incoming acquisition of Argentina-based Citibank NA's retail banking business, Moody's said.

* Banco de Galicia y Buenos Aires SA's sale of its financial services business Compañía Financiera Argentina SA, known as Efectivo Sí, will improve its capital base and increase credit support for priority areas, including commercial lending and investment, the bank said.

* Javier González Fraga, the new head of state-owned Banco de la Nación Argentina, said he plans to focus his management efforts on mortgage lending and loans to SMEs in the productive sector.

* Shinkin Central Bank signed an agreement with Banco Mercantil del Norte SA Institución de Banca Múltiple to provide financial support for Japanese shinkin banks' customers in Mexico.

* Shareholders of Banco Compartir SA approved the acquisition of a technology platform, known as Core Bancario.

In other news

* Banco Central de la República Argentina maintained its benchmark interest rate again at 24.75%.

* Banco Central do Brasil's monetary policy committee said its recent cuts to the country's benchmark Selic rate will not compromise its goal of lowering inflation to its targeted 4.5% level.

* Moody's said that it has a negative outlook for Latin America and the Caribbean's overall sovereign creditworthiness in 2017.

* The International Monetary Fund forecasts the Latin American economy will grow 1.2% in 2017, 40 basis points lower than its previous projection for the region in October 2016.

* Banco Central de Chile lowered its benchmark interest rate by 25 basis points to 3.25%.

Featured this week on S&P Global Market Intelligence

* Best of the Web: A U.S. bank reaps market share in Brazil as its rivals retreat; Brazil serves as a cautionary tale against big government spending; and Donald Trump's "Mexico-bashing" could backfire.

* 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.