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Report: Government pressure could push Argentine banks to sell Visa Argentina, Banelco

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Report: Government pressure could push Argentine banks to sell Visa Argentina, Banelco

Argentinebanks with stakes in credit card issuer Visa Argentina and ATM network operatorBanelco SA areconsidering selling the companies amid growing pressure from local authorities tolower commissions and improve transparency, LaNación reported Sept. 22.

Thenational antitrust commission, CNDC, recently an investigation into allegedanti-competitive practices by electronic payments firm , which isowned by the banks through a strategic alliance between Visa Argentina andBanelco. Prisma faces a possible fine of up to 150 million pesos,according to a previous report.

Inaddition to the CNDC investigation, Argentina's congress is debating tightercontrol of the credit cards market after the Argentine confederation ofmedium-sized enterprises, known locally as CAME, submitted a bill to eliminatecommissions charged to retailers on credit card transactions.

Inthis scenario, and amid greater scrutiny and lower commissions, banks maydecide to exit the card processing and ATMs business by selling Visa Argentinaand Banelco, the report said, citing a source close to the process.

Banksare still in discussions with local authorities, but if the sale goes ahead itcould be completed by May 2017, according to the newspaper's source.

Thisis not the first time local banks have sought to sell Visa Argentina. Theyreportedly tried in 2011, hiring Morgan Stanley to manage a transaction thoughtto be worth $700 million; however, the sale did not go through, partly due todeteriorating economic conditions.

Accordingto the central bank, there were 35.6 million credit cards and 38.8 milliondebit cards issued in the country as of June. Visa Argentinareportedly has about 60% of the national credit card market.

Prisma'smain shareholders include Bancode Galicia y Buenos Aires SA, Banco Santander Río SA, and , among others.

Accordingto its website, Banelco's shareholders includes those banks, as well asBanco Comafi SA,Banco Itaú ArgentinaSA, Banco MacroSA, Banco PatagoniaSA, HSBC BankArgentina SA and Industrial & Commercial Bank of China (Argentina) SA.

As of Sept. 21, US$1 wasworth 15.14 Argentine pesos.