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Moody's revises Brazil's banking outlook; J&F leniency 'breach' probed


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Moody's revises Brazil's banking outlook; J&F leniency 'breach' probed

* The Brazilian public prosecutor's office is looking into whether holding company J&F Investimentos SA breached the terms of a leniency deal it reached with the government earlier in the year, Reuters reported, citing office representatives.

* Moody's revised its outlook on Brazil's banking system back to negative from stable. The action reflects the risk on banks' financial fundamentals, particularly asset risk and profitability, due to ongoing political uncertainty, as well as the negative outlook on Brazil's Ba2 sovereign rating.

* Banco do Nordeste do Brasil SA said 234 employees joined its voluntary redundancy program, short of the original goal of up to 2,000 employees. The employees were terminated Oct. 6, with the program incurring costs totaling 54.2 million Brazilian reais.


* Armando Calderon, El Salvador's president from 1994 to 1999, died at 69 years old, Reuters reported, citing the family.

* Mexico recorded consumer price inflation for the year through September at 6.35%, compared to a 6.48% forecast, Reuters reported. Inflation for September alone was up 0.31% from August.

* Mexican investigators are looking into corruption or negligence as having possibly contributed to the death toll amid recent earthquakes, particularly in buildings that may have fallen short of safety regulations, the Financial Times reported.

* Banco Central de Costa Rica said it is discouraging the use of bitcoin as it is not regulated by the country's financial system, El Financiero reported.

* Panama introduced a new policy for the support and promotion of small and medium enterprises in the country, El Capital Financiero reported. The government will support businesses in areas such as information systems, data management and statistics, formalization, access to financial systems, internationalization and technological innovation.


* Brazil's Banco CBSS SA is initiating partnerships with financial technology firms with the aim of securing a 30% market share of the fast growing digital credit market by 2018, and has forged its first partnership with fintech Bom Pra Crédito, Reuters reported. Under the partnership, fintech firms will reportedly receive loan applications and filter risk profiles of borrowers for the bank, the actual lender.

* Credit recovery in Brazil for the period from January through September declined 2.5% compared to the year-ago period, according to data from credit research firm Boa Vista SCPC. For the 12 months through September, the credit recovery index, which is derived from the number of removals from the delinquency records in the firm's database, fell 3.0% year over year.

* Market analysts raised the projections for Brazilian inflation in 2017 to 2.98%, still below the 3% target, Valor Econômico reported, citing a central bank publication.

* The Brazilian government wants to expedite legislation aimed at helping consumers with little or no history of defaults to get better interest rates in loans, Diário Comércio Indústria & Serviços reported, The Febraban bankers' group says the measure will lead to a 45% cut in the overall default rate.

* The insurance market in Brazil registered a 4.8% growth in August, with a combined value of 160.50 billion reais, Diário Comércio Indústria & Serviços reported. Despite the positive results, the national confederation of insurance companies recommended caution as market recovery is still slow.

* Brazilian funds have collected a total of 220.70 billion reais between January and September, with individual deposits accounting for 57% of net contributions volume in the portfolios, Diário Comércio Indústria & Serviços reported.

* Banco Nacional de Desenvolvimento Econômico e Social President Paulo Rabello de Castro denied claims suggesting irregularities in loans granted by the bank to meatpacker JBS SA, Folha de S.Paulo reported. The executive said that despite monitoring mechanisms, the institution cannot take responsibility for how the money will be used.

* Brazil's gross debt may risk surpassing 100% of GDP, Folha de S. Paulo reported, citing a study by the Senate body Instituição Fiscal Independente.


* The new rule by the Colombian financial supervisor Superintendencia Financiera requiring banks not to classify reported restructured loans as nonperforming is a credit negative for local banks, Moody's said. Moody's believes the regulation will delay provisioning and reduce the transparency of their loan portfolios and understate asset risks.


* A magnitude 6.3 earthquake hit 73 kilometers east of the Chilean city of Arica early on Oct. 10, Reuters reported, according to the U.S. Geological Survey. No tsunami warning was raised.

* Banco Mariva SA said it has raised about 195.6 million Argentine pesos in an Oct. 9 placement of series VIII bonds due in 2018. The bonds were originally placed for up 150 million pesos, expandable up to 300 million pesos, with the bank receiving orders totaling 270.5 million pesos.

* An Argentine court's decision to junk a 2012 law that shifted the flow of judicial deposits to Banco de la Nación Argentina and away from Banco de la Ciudad de Buenos Aires is credit positive for the latter, Moody's said. The new ruling will give Banco Ciudad access to stable, cheaper long-term deposits, as it previously had to seek other funding sources such as issuing unsecured debt, which negatively affected its profitability, according to Moody's.

* Argentina's Banco Hipotecario SA converted 19,979 class A shares to an equal amount of class D shares.

* Argentina might have to toughen its monetary policy in the coming months, as Banco Central de la República Argentina has been facing challenges to go below the 1.5% inflation border, El Cronista reported.

* Argentine banks have started to improve rates offered to depositors, as the country observes a credit boom, La Nación reported. A central bank survey showed that fixed short-term retail income averaged 18.2%.


* U.S. company EZCORP Inc. has acquired pawn store chain GuatePrenda – MaxiEfectivo, paying $53.4 million in cash for the purchase and an additional $2.3 million in deal consideration, tied to the performance of the business. With the acquisition of GuatePrenda – MaxiEfectivo, which owns and operates 112 pawn stores located in Guatemala, El Salvador, Honduras and Peru, EZCORP now has a total of 871 pawn stores, including 513 in the U.S. and 358 in Latin America.

* A survey by Transparency International of over 22,000 people within Latin America found that 29% of them admitted to paying bribes to public servants in 2016. The figure totals about 90 million who admitted paying bribes, but only 9% admitted it to the authorities, while 28% said they received retaliation in response to admissions.


* Asia-Pacific: Indonesia to probe StanChart asset transfer; Reliance General files for IPO

* Middle East & Africa: SBM offers to buy Chase Bank; NBK Q3 profit up; Zimbabwe gets new finance chief

* Europe: Italy's bad loan concerns; Deutsche's Cryan loses support; Danske blacklisted

* North America: OneMain may sell itself; CIT inks deal to sell reverse mortgage servicing biz

* North America Insurance: Trump order could split insurance market; judge tosses suit against UnitedHealth

Mariana Aldano contributed to this article.

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