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Brazil's top court postpones decision on recalculation of state debt

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Brazil's top court postpones decision on recalculation of state debt

* Brazil's Supreme Court postponed by 60 days its decision on whether itwill allow states to recalculatetheir debt owed to the federal government using linear interest rates asopposed to compound rates, Reuters reported. The government believes thischange could cut its revenue by about 400 billion Brazilian reais.

MEXICO ANDCENTRAL AMERICA

* posted netincome of 3.54 billion Mexican pesos for the first quarter, up10.1% from 3.22 billion pesos earned a year ago. Additionally, the companyhired Didier Mena to serve as its CFO.

* Midsized banks inMexico have maintained fast growth in recent years, reflecting their high riskappetite and specialization in specific sectors that are less served bybigger lenders, Fitch Ratings said. Mexican midsized banks have also shownmoderate but sustained profitability, which has been resilient through theeconomic cycle.

* Mexican PresidentEnrique Peña Nieto signed a financial-discipline law that sets limitson how much local governments can borrow, TheWall Street Journal reported. The law also obliges local governments toborrow from lenders that provide the most attractive terms, among othermeasures.

* Guatemala'sgovernment is gauging investor appetite ahead of a global bondissuance that could take place as early as April 28, Thomson Reuters' IFRreported, citing market sources.

* appointed Olga Sánchez Cordero, a former minister of Mexico's Supreme Court ofJustice, as an independent advisorto the company, El Economistareported.

* Mexico'sinstitute for transparency, access to information and personal data protection,the INAI, has asked banking regulator CNBV to explainin detail how it evaluates banks, ElEconomista reported.

* posted a first-quarter netprofit of about 2.11 billion Mexican pesos, down 47.48% from 4.01 billionpesos in the year-ago period, ElEconomista reported.

BRAZIL

* said itsformer CEO, André Esteves, will be reinstated at the company as a senior partner. Esteves,who was recently released from house arrest, will be "focused onpartnership matters, advising BancoBTG Pactual SA on strategy and supporting the development of itsactivities and operations," the company said.

* Difficultiesfaced by Banco SantanderSA's Brazilian unit are down to currency fluctuations and do notreflect a drop in Brazilian real-denominated earnings, which are expected toremain stable or even improve in 2017, the Spanish bank's top executives saidduring a conference call.

* 's monetarypolicy committee voted unanimously to maintain its benchmarkSelic rate at 14.25%. The decision took into account high levels of inflationduring the last 12 months, as well as future inflation expectations.

* If BrazilianPresident Dilma Rousseff is impeached and Vice President Michel Temer assumespower, he would prioritizepension reforms in the country and look to reduce spending, Reuters reported,citing Senator Romero Juca, the leader of the Brazilian Democratic MovementParty.

* Brazilian oil rigbuilder Sete Brasil Participacoes SA may seek bankruptcyprotection as soon as this week, Bloomberg News reported, citing "peopledirectly involved with the company's finances." More than 50% of Sete Brasil's18 billion Brazilian reais of liabilities are owed to Brazilian state-run banksand a fund linked to the government, according to the report.

* posted adjusted netincome of about 4.11 billion Brazilian reais for the first quarter, down3.8% from 4.27 billion reais in the year-ago period. The bank recorded 5.45billion reais in allowance for loan loss expenses in the first quarter, up from3.58 billion reais a year earlier.

* CEO SergioRial attributed the bank's growth in revenue for the first quarter to a highlevel of customerloyalty, Valor Econômicoreported. The executive also said Brazil will only be able to implement reformsif it first achieves politicalconsensus.

ANDEAN

* Venezuela'srecent restructuring of its exchange rate regime is unlikely to have a largeimpact on bankprofitability or capital, Fitch Ratings said, adding that the policy change isneutral for bank ratings. In March, the Venezuelan government launched a newdual exchange rate system that includes a fixed rate for essential goods andservices and a floating rate for all other areas of the economy.

* Ecuador has askedthe IMF to open a credit linefor the country following a recent 7.8-magnitude earthquake, Reuters reported,citing Alejandro Werner, director of the IMF's Western Hemisphere Department.Werner did not specify the amount requested by Ecuador.

SOUTHERN CONE

* Standard & Poor's Ratings Services a B+ global scale credit ratingand uyBBB national scale credit rating, both with a stable outlook, toBanque Heritage (Uruguay) SA.The ratings reflect the bank's moderate business position in Uruguay'sfinancial system and its adequate capital and earnings.

* Banco de Galicia y BuenosAires SA's shareholders approved a proposal to increase the amount the bank canissue under a global bond program to $600 million from $500 million, said.

* Argentina's Senate approved a bill that prohibits layoffs in both thepublic and private sector for the next 180 days despite opposition fromPresident Mauricio Macri, Valor Econômicoreported.

PAN LATIN AMERICA

* Continuing weak economic activity in most Latin Americancountries, including lower credit growth and higher sovereign spreads, couldraise funding costsfor banks in the region and reduce their profitability, the InternationalMonetary Fund warned. Going forward, banks should monitor their balance sheetsand asset quality "given rising corporate leverage, modest growthprospects, and high dollarization in certain countries," the IMF noted.

* In the first quarter, there were 59 merger and acquisition in Latin America involvinga total amount of $17.2 billion, ElEconomista reported, citing a study by Baker & McKenzie and MergerMarket. Eight of the deals originated from Colombia.

* The fast rise in private-sector debt in emerging-market countries,combined with extensive depreciation of local currencies, have increased downsiderisks for their economies, financial systems and sovereign creditworthinessat a time of heightened global uncertainty, Fitch Ratings said.

* First Cash FinancialServices Inc. and CashAmerica International Inc. agreed to in a tax free, all-stocktransaction. The combined company will have operations in four countries,including almost 1,200 stores in the U.S. and 936 Latin American locations.

IN OTHER PARTSOF THE WORLD

* TheReserve Bank of NewZealand said it has maintained the official cashrate at 2.25%. The central bank added that long-term inflation expectationsare well anchored at 2%.

* will launch Samsung Pay in Australia soon,following Apple Pay's successful entry into the country, ZDNet reported, citinga statement from the bank.

* ECB PresidentMario Draghi said he is willing to appear before the German parliament to defendthe central bank's loose monetary policies, Reuters reports. However, Draghiwarned that "[a]ny perception that the ECB's independence is under attackcan unsettle businesses and consumers," and could hurt the central bank'seffectiveness.

* The Organisationfor Economic Co-operation and Development warned that a vote by the U.K. toleave the EU would cause a "severe negative shock"to the economy and weaken the country's GDP growth "for many years."The OECD said a Brexit would immediately hit confidence and raise uncertainty,which would result in GDP being 3% lower by 2020.

* German FinanceMinister Wolfgang Schäuble wants banks to report to tax authorities if they organizeoffshore activity for their customers, and taxpayers should be obliged toinform the tax office if they have founded or obtained shares in offshorefirms, Frankfurter Allgemeine Zeitungreports.

S&P Ratingsand Global Market Intelligence are owned by McGraw Hill Financial Inc.

Paula Mejiacontributed to this article.

TheDaily Dose has an editorial deadline of 8:00 a.m. São Paulo time, and scansnews sources published in English, Portuguese and Spanish. Some external linksmay require a subscription.