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Santander to expand stake in Mexican unit; BNDES may pay 3.2B reais to Treasury

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

M&A updates

* Banco Santander SA will increase its stake in Banco Santander México SA to 91.65% from 74.96%, following the expiration of the acceptance period for exchange offers made by the Spanish lender for shares in the Mexican unit.

* Brazilian state-owned bank Banco do Estado do Rio Grande do Sul SA said it will issue 96,323,426 common shares owned by its controlling shareholder, the state of Rio Grande do Sul.

* Panama-based Mercantil Servicios Financieros Internacional SA, through its subsidiary Mercantil Holding Financiero Internacional SA, acquired 100% of Switzerland's Mercantil Bank (Schweiz) AG from Venezuela-based parent Mercantil Servicios Financieros CA.

Legal news

* A group of Chilean investors is suing Banco de Chile and Banco Santander Chile for 6.00 billion pesos due to their negligence in a Ponzi scheme case involving Alberto Chang and his companies, Grupo Arcano and Onix Capital LLC.

* Brazilian prosecutors filed a lawsuit against Banco Santander (Brasil) SA, Banco Finaxis SA, Trendbank SA Banco De Fomento, brokerage company Planner Corretora de Valores SA, and 12 individuals over alleged losses suffered at pension funds Petros and Postalis.

Ventures

* Japan's SoftBank Group Corp. is in discussions with Latin American venture capital firms to potentially invest hundreds of millions of dollars in their funds, three sources with knowledge of the matter said.

* U.S.-based Bond Capital will launch a venture capital fund in Brazil that will be distributed locally by Banco BTG Pactual SA. The company is looking to gain 300 million Brazilian reais from the domestic market to build the fund, which reportedly will be restricted to professional investors.

In other news

* Banco Nacional de Desenvolvimento Econômico e Social may transfer about 3.2 billion Brazilian reais of profit to Brazil's National Treasury by the end of 2019, the development bank's Chairman Carlos Thadeu de Freitas said.

* The U.K.'s TTT Moneycorp Ltd. obtained a license to operate as a currency exchange bank in Brazil. The unit, which will be named Moneycorp Banco de Câmbio, will primarily offer services to small and medium-sized enterprise and midcap clients.

* Banco Central de la República Argentina introduced a currency measure that would keep traders from making quick, same-day returns via foreign currency, in a bid to contain market volatility, the central bank said in a statement.

* Inter-American Development Bank approved a $250 million loan to Uruguay to support investment and international trade in the Latin American country.

* Barbados-based FirstCaribbean International Bank Ltd. posted net income of about $48.6 million for its fiscal third quarter ended July 31, up 28% from $38.0 million in the year-ago period.

* Banco Pan SA said it will launch a restricted follow-on offering of up to 138,000,000 preferred shares. The bank and its shareholder, Caixa Participações SA, look to initially sell a total of 115,000,000 preferred shares, equally divided between a primary and secondary distribution. However, the initial offering can be increased by up to 20%, or an additional 23,000,000 preferred shares.

Featured this week on Market Intelligence

* BTG Pactual's resiliency tested again in latest corruption probe: Banco BTG Pactual, Latin America's largest investment bank, spent much of the past four years recovering from a crippling corruption scandal; now it must defend itself against alleged irregularities in the purchase of oil fields from state-owned Petrobras.

* Net interest margins generally improve for LatAm bank majors in Q2: The majority of Latin America's largest banks posted increases in their net interest margins in the second quarter of 2019 compared to a year earlier, with two Argentine banks taking the lead.

* Brazilian banks improve CET1 ratios in Q2: In a sample of 17 institutions analyzed by S&P Global Market Intelligence, nine reported a negative change in their common equity Tier 1 ratios compared to the first quarter. Six of the remaining eight banks that posted higher ratios are based in Brazil.

* 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.