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US authorities probe Grupo Aval; Global Bank completes Banvivienda purchase

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

Legal avenue

* Colombia's Grupo Aval Acciones y Valores SA said it received an inquiry from the U.S. Department of Justice concerning Ruta del Sol 2, a highway project in which scandal-plagued Brazilian conglomerate Odebrecht was also involved. The company did not provide any details on the U.S. investigation, but vowed to cooperate with the inquiry.

* Jorge Horacio Brito, the former chairman of Banco Macro SA and unit Banco del Tucumán SA, is being prosecuted by a federal judge in Argentina for his alleged involvement in a corruption case related to former Argentine Vice President Amado Boudou. Brito took a leave of absence from both banks in late 2017 after media reports linked him to the so-called Ciccone political scandal.

* Brazilian payment processor XP Investimentos plans to sue Banco BTG Pactual SA for allegedly breaking a two-year confidentiality agreement signed when the latter was hired as an IPO underwriter, Valor Econômico reported. XP reportedly said BTG exploited confidential information accessed at the time to create and promote its own digital investment platform, now a competitor, by replicating the broker's distribution network.

Deal table

* Global Bank Corp. said it completed its acquisition of 99.972% of the shares of Banco Panameño de la Vivienda SA, or Banvivienda, for a total cash-and-stock consideration of $202.9 million. The purchase price may increase by $12 million in cash and $8 million in stock subject to certain agreed conditions.

* Banco Nacional de Desenvolvimento Econômico e Social, or BNDES, reportedly postponed the sale of part of its stake in scandal-plagued meat processor JBS SA to 2019 after market volatility prevented the planned divestment from taking place this year. BNDES holds a 21.3% stake in JBS through its investment arm.

* The Costa Rican government will need to inject 30 billion colones of capital into Banco de Costa Rica as part of the bank's acquisition of troubled state-run lender Banco Crédito Agrícola de Cartago, El Financiero reported. The move will reverse a possible negative impact on Banco de Costa Rica's equity following the Bancrédito takeover.

Reorganizing

* The board of Argentina's Banco Hipotecario SA approved a transaction that will see the bank acquire the remaining 20% stake in card processor Tarshop SA. Banco Hipotecario currently owns 80% of Tarshop's capital stock.

* Leasing Corficolombiana SA Compañía de Financiamiento will transfer a chunk of its financing and credit leasing business to Banco de Occidente SA. Both companies are owned by Grupo Aval.

In other news

* A committee in Colombia's lower house has given preliminary approval to a bill that would ban banks from collecting management fees on savings accounts and debit and credit cards. Three more debates on the matter are expected.

* Brazilian brokers and currency dealers are looking to gain independence from traditional banks by setting up their own payment system, called Simov.

* Citigroup Inc. aims to increase investments in Mexican unit Grupo Financiero Citibanamex SA de CV as part of its growth plans in Latin America for 2019, according to Jane Fraser, Citi's CEO for Latin America. Citi is also looking to expand its corporate and investment banking operations in Argentina, Colombia and Brazil.

Featured this week on S&P Global Market Intelligence

* Most major LatAm banks post improved CET1 ratios in Q3: The majority of the largest banks in Latin America posted an improvement in their fully loaded common equity Tier 1 ratios in the third quarter compared to the previous quarter, with three Brazilian lenders recording the highest jumps.

* Argentine banks' net interest margins continue to benefit from elevated rates: Most of the largest banks in Latin America booked higher net interest margins in the third quarter compared to a year earlier, with Argentine lenders posting the strongest gains.

* 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.