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Davivienda's Q4 profit tumbles; Cade expected to OK Itaú-XP deal

* Banco Davivienda SA posted net income of 360 billion Colombian pesos for the fourth quarter of 2017, down 32.7% from 535 billion pesos in the year-ago period. The bank's net allowances increased 176.6% year over year to 512 billion pesos.

* Brazilian antitrust watchdog Cade is expected to approve Itaú Unibanco Holding SA's planned acquisition of an initial 49.9% stake in brokerage firm XP Investimentos SA on March 14, Folha de S.Paulo reported, citing sources who took part in the discussions.

MEXICO AND CENTRAL AMERICA

* Mexican credit ratings agency HR Ratings said the country's commercial banks are strong and stable enough to withstand potential volatility arising from domestic or international political issues, El Economista reported. The sector should report high profits in 2018, but credit growth is unlikely to reach double digits this year, the rating agency said.

BRAZIL

* Fitch Ratings downgraded the viability ratings of Itaú Unibanco SA and Itaú Unibanco Holding SA to "bb" from "bb+." The downgrade follows a similar action on Brazil's sovereign rating, Fitch said, adding that Itaú has a very strong credit profile, adequate loss absorption capacity and high liquidity. Fitch also lowered the banks' long-term foreign and local currency issuer default ratings to BB from BB+.

* Banco Bradesco SA's shareholders approved a proposed capital increase of 8.00 billion reais, allowing the bank to raise its capital stock to 67.10 billion reais from 59.10 billion reais. New shares will be allotted to shareholders at the ratio of 1 new share for every 10 shares already held.

* Credit recovery in Brazil grew 0.3% in February from the previous month on a seasonally adjusted basis, and was up 3.7% compared to a year earlier, according to credit research firm Boa Vista SCPC. Credit recovery for the 12 months through February fell 0.3% year over year.

* Itaú Unibanco Holding SA priced a $750 million offering of perpetual Tier 1 subordinated notes, saying the notes will be issued at a fixed rate of 6.5% on March 19. The offer price of the notes was 100%, resulting in a yield of 6.5% until the fifth anniversary of the issuance. After that, the coupon will be reset every five years based on the prevailing rate for U.S. Treasury bonds.

* Brazilian central bank chief Ilan Goldfajn said financial technology firms will help boost competition in the country's credit market, adding that regulations for the budding sector should be ready soon, Diário Comércio Indústria & Serviços reported.

* A study by consultancy firm Roland Berger concluded that medium-sized banks in Brazil appear set for a new round of consolidation amid high costs and falling profitability, Valor Econômico reported. Banks that embrace a digital model are more likely to survive, according to the study.

* Nilson Teixeira, the chief economist at Credit Suisse Group AG's Brazilian unit, is resigning from the bank to pursue other projects, Valor Econômico reported.

* Caixa Econômica Federal CEO Gilberto Occhi said the state-run bank could still use resources from the FGTS workers severance fund in order to recapitalize itself, even though local authorities have warned that such a move would be illegal, Valor Econômico reported.

ANDEAN

* Venezuela's opposition coalition has asked the United Nations not to send any observers for a presidential election in May, arguing that their presence would lend credibility to a fraudulent vote, Reuters reported. The opposition parties have boycotted the upcoming poll as some of their candidates have been imprisoned or banned from holding office.

* Venezuela's opposition-led National Assembly estimates that inflation in the country reached 6,147% in the 12 months through February, Reuters reported. The estimate is more or less in line with forecasts from independent economists.

* Legislation approved by Peru's Congress earlier in March allows banks to resume lending to the country's embattled construction industry, which has been caught up in a wide-ranging corruption scandal, Gestión reported, citing a briefing note from BTG Pactual. The law will help reinvigorate Peru's economy, the bank said.

* Colombia's government will resume peace discussions with the ELN rebel group in Ecuador following a six-week hiatus, Reuters reported, citing Colombian President Juan Manuel Santos.

* BNP Paribas Cardif SA Compañía de Seguros y Reaseguros said it appointed Marcos Alejandro Peñailillo Peñailillo the company's new CEO, replacing Laurent Marcel Pierre Laouenan, effective March 13.

SOUTHERN CONE

* Wanap, Argentina's first fully digital bank, is preparing to start operations in May with a focus on retail banking, Infotechnology reported, citing company executives. The bank may need to raise $22 million once it gets the green light to enter the market, according to Wanap President Guillermo Francos.

* Argentine consumer defense association ADUC has filed a class-action lawsuit against Banco de Galicia y Buenos Aires SA, alleging that the bank mishandled communication when it sent certain information electronically and other documents physically.

* Fitch Ratings said Sebastián Piñera's return to Chile's presidency could boost economic confidence in the country, though the upside for growth remains unclear. The rating agency said major reform proposals to drive investment are limited, while those already floated face fiscal and political challenges. Piñera's administration will prioritize austerity measures and hone plans to streamline the country's tax code, Reuters reported, citing Finance Minister Felipe Larrain.

* Analysts widely expect Argentina's central bank to hold its benchmark interest rate steady at 27.25% today, El Cronista reported.

* In a letter to shareholders, Itaú CorpBanca Chairman Jorge Andrés Saieh said rising demand for credit from retail clients bodes well for the growth of the bank's consumer and housing loan portfolios in 2018, Pulso reported.

* Chilean banks saw their leasing businesses grow 20.9% between 2013 and 2017 despite the country's economic slowdown, Diario Financiero reported, citing regulatory data.

IN OTHER PARTS OF THE WORLD

* Middle East & Africa: QNB seeks higher foreign ownership cap; Ghanaian bank to raise 330M cedis in IPO

* Europe: ING scraps CEO pay rise plan; Monte dei Paschi names CFO

Helen Popper contributed to this article.

The Daily Dose has an editorial deadline of 8:00 a.m. São Paulo time, and scans news sources published in English, Portuguese and Spanish. Some external links may require a subscription.