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News through July 22


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According to Market Intelligence, April 2023

News through July 22

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

Earnings highlight

* Grupo FinancieroBanorte SAB de CV showed second-quarter net income of 4.63 billion Mexican pesos, up from 4.00 billionpesos earned in the year-ago period. For the group, net interest income ticked 9%higher year over year to 12.65 billion pesos.

* Grupo FinancieroBanamex SA de CV posted a netprofit of 4.51 billion Mexican pesos for the second quarter, down 31%from a year earlier, mainly due to the sale of its merchant acquiring business inthe second quarter of 2015. Excluding income from that sale, the group's second-quarternet income grew 2% year over year.

On the M&A front

* Citigroup Inc.has extended to Aug. 1 from July 25 the deadlinefor companies to submit final bids for its retail banking operations in Argentina.The winner could be announced "one or two weeks" later, according to areport.

* BTG Pactual Groupsaid it is "merely speculative" that Brazil's credit guarantee fund FGCwill approve the bank'splans to purchase Portugal-based Banif-BancoInternacional do Funchal SA's Brazil unit Banif - Banco Internacional do Funchal (Brasil) SA. Althoughthe FGC did not confirm its approval of the deal, a report said the agreement is"virtually closed."

* Banco do BrasilSA may sellpart of its ownership stakes in BancoVotorantim SA and BancoPatagonia SA as the bank looks to bolster its capital position. Thebank has yet to decide if it will move forward with the stake sales, but the state-runbank has been disappointed with the results of both entities and hopes to avoidproviding any capital injection to either institution, a report said.

* Bancolombia SAis holding an extraordinary shareholders' meeting Sept. 20 to several items regarding its mergerwith unit Leasing Bancolombia SA Compañíade Financiamiento.


* HSBC México SAInstitución de Banca Múltiple Grupo Financiero HSBC has launched a newstrategy to expand lendingto small and medium-sized enterprises, which represent a key potential market forthe bank. The bank is looking to provide credit to SMEs according to their specificneeds at a lower cost than personal loans.

* Banco BilbaoVizcaya Argentaria Colombia SA has invested $40 million in its digital transformation strategyin the last three years to meet new challenges in the global banking system. Thestrategy is in line with the digital reality of the country, given that the numberof electronic banking users in Colombia rose 28.7% between 2013 and 2015.

* BBVA BancomerSA Institucion de Banca Múltiple Grupo Financiero BBVA Bancomer recentlylaunched a campaign toadd up to a million additional payroll accounts in Mexico in 2016 despite the economy'srecent deceleration. The bank currently has about 7 million payroll accounts onits books, which represents 27% of such accounts in Mexico.

* In an effort to postpone near-term capital injection needs,Banco do Brasil is reportedly mullingan asset sale to reinforce its capital base. The state-run bank may sell a 5% to10% stake in its cards business and third-party asset management operations througheither an initial public offering or a joint venture.

Regulatory boulevard

* Mexico's housing information platform, Registro Único de Vivienda,and the country's banking association, ABM, have signed an agreement to increase transparency and offer better mortgageconditions to homebuyers. The country's 16 banks that offer mortgages will provideinformation to the RUV, including the number of mortgages approved, financing conditionsand locations of the loans.

* BBVA Bancomer received 53.4 million Mexican pesos in tied to its mobile bankingapplication during the first quarter, according to the country's financial consumerprotection agency, Condusef. The agency also plans to meet with the managers of Banco Monex SA Institución de Banca Múltiple Monex Grupo Financiero,Bansi SA Institución de Banca Múltipleand BanCoppel SA Institución de BancaMúltiple after the three recorded the highest percentage of increasesin e-commerce complaints over the past year.

* Banco Nacionalde Desenvolvimento Econômico e Social raised 7 billion Brazilian reais in 2008 from infrastructurefund FI-FGTS after changes were made in the fund's bylaws that allowed transactionswith financial institutions and development banks. The statement follows an O Globo report claiming that the state-run bank allegedly raised 17 billionreais from the fund, which is linked to the country's employee indemnity guaranteefund FGTS, through transactions that violated the fund's bylaws.

* Banco Centralde la República Argentina plans to remove in the coming weeks a restriction that prevents anindividual or business from acquiring more than $5 million worth of U.S. dollarsin the local market per month. The move is designed to facilitate trade, specificallyimports, which could be restricted by the current limit on U.S. dollar currencypurchases.

* Just 22 private banks in Mexico meet the information security requirements to participatein the central bank's interbank payment system in dollars known as SPID. A totalof 25 banks that offer accounts with deposits in dollars are obligated to join thesystem, meaning three banks were still pending as of July 14.

Legal proceedings

* The majority of small and medium-sized banks in Brazil havestopped granting new payroll-backedloans to public servants in the states of Rio de Janeiro, Tocantins and Amapá dueto a spike in payment delays. The financial institutions plan to file lawsuits againstthe three states as the banks allege that the governors of such states are misusingtheir employees' payroll loan payments to balance their own fiscal budgets.

* In the midst of tax authority AFIP's investigation into taxevasion at Grupo Indalo,an Argentine federal court judge has ordered that the assets of the group's owner,Cristóbal López, and his partner Fabián de Sousa, be frozen, including their participation in subsidiary .

Capital in motion

* Crédito RealSAB de CV Sociedad Financiera de Objeto Múltiple ER said it has the international marketswith the placement of $625 million in senior notes due 2023.

* BACS Banco deCrédito y Securitización SA will issue 24-month bonds with a nominal value up to 30 million Argentine pesos,expandable up to 250 million pesos.

* Peru's Bancode Comercio SA issued10-year subordinated bonds worth 4.5 million soles.

* Banco BilbaoVizcaya Argentaria Chile SA placed bonds worth 2 million UF, or about 52.2 billion Chilean pesos,through a Dutch auction.

* World Bank Group's arm, International Finance Corp., is lending $50 million to to expand thebank's long-term lendingto small and medium enterprises in Argentina.

* Scotiabank deCosta Rica SA obtaineda $125 million syndicated loan from a group of international banks.

* Grupo FinancieroInbursa SAB de CV unit BancoInbursa SA Institución de Banca Múltiple Grupo Financiero Inbursa 3 billion Mexican pesos outof the 5 billion pesos it hoped to attain from the sale of two- and three-year bonds.

In other news

* Panama's private banking sector posted year-over-year loangrowth of 10.46% in thefirst five months of 2016, reaching a total portfolio of 46.40 billion Panamanianbalboas.

* Caixa EconômicaFederal has doubledthe maximum value of real estate properties that can be financed through savingsdeposits to 3 million Brazilian reais from 1.5 million reais. The state-run bankalso increased the maximum loan-to-value ratios to be financed to 80% from 70% fornew properties.

* Mexico's plan to dismisseducators for failing new evaluations could hit local payroll lender Crédito Real,which relies heavily on teachers for its revenues, Bloomberg News reported.

* A new provisionalmeasure in Brazil that will allow the use of up to 10% of the employeeindemnity guarantee fund, known as FGTS, as collateral for payroll-backed loansis credit positive for Brazilian banks, Moody's said.

* Banestes SA -Banco do Estado do Espírito Santo said there are to privatize the state-run bankfollowing a report suggesting that it could be sold off.

Featured this week onS&P Global Market Intelligence

* Higher interestrates seen benefiting Mexican banks' Q2 results: Mexico's central bank,Banxico, raised its benchmark interest rate twice in the first half of 2016, whichis expected to translate into benefits for Mexican banks through higher net interestmargins.

* Brazil's longroad to recovery could begin where impeachment process ends: As athletesgather in Rio de Janeiro for the 2016 Summer Olympic Games next month, Brazilianpoliticians some 700 miles away, in the capital of Brasília, will be preparing fora very different kind of contest.

* Best of the Web:Brazil's "iron lady" aims to revamp BNDES; Argentina's Macri faces discontentmentat home; and a look at why Mexico's bright-minded technocrats have failed to spurfaster economic growth.

* Hires and Fires:A weekly rundown of executive management, board and other personnel moves at LatinAmerican financial institutions.

* Ratings Roundup:A summary of various ratings actions on Latin American financial institutions andeconomies.