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Exit strategies; earnings salvo

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Exit strategies; earnings salvo

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

Exit strategies

* Argentina's central bank approved Banco Santander Río SA's acquisition of Citigroup Inc.'s Argentine retail banking unit, a deal involving assets totaling US$1.4 billion.

* Investa Bank SA Institución de Banca Múltiple is back on track with its plan of acquiring Deutsche Bank México SA Institución de Banca Múltiple after a criminal investigation into a partner did not lead to any action against the bank.

* Banco do Brasil SA CEO Paulo Caffarelli said the bank is still planning an IPO for the bank's stake in Banco Patagonia S.A., despite having garnered interest from several Argentine banks to acquire the unit.

* Banco Macro SA, Grupo Financiero Galicia SA and BBVA Banco Francés SA are reportedly ready to submit bids for Banco do Brasil's majority stake in Banco Patagonia.

* Jane Fraser, Citi's CEO for Latin America, said Argentina will see significant growth in M&A activities and IPOs this year.

Earnings salvo

* Grupo Security SA posted a 10.0% rise in its fourth-quarter net profit, reaching 15.15 billion Chilean pesos, as results from its Banco Security SA unit more than quadrupled.

* Caixa Econômica Federal booked an 11.2% rise in fourth-quarter 2016 profit, coming to 691 million Brazilian reais, as the company saw stronger net interest income and boasted its best efficiency ratio in a decade.

* Banco Indusval SA reported a net loss of 28.8 million reais for the fourth quarter of 2016, widening from a 17.4 million reais loss a year earlier.

* Grupo Aval Acciones y Valores SA said that its fourth-quarter 2016 net profit shrank by a third annually to 458.4 billion Colombian pesos as the bank saw a sharp increase in impairments.

* Higher income from its loan and investment portfolios helped Banco Davivienda SA increase its fourth-quarter 2016 profit by 67.6% year over year to 535 billion pesos.

Legal briefs

* A court in Brazil ruled against Banco Alfa SA in a 3 million Brazilian reais lawsuit accusing the bank of inappropriately charging interest on the early termination of financing.

* The Argentine consumer defense association known as ADUC filed a class-action lawsuit against Banco de Galicia y Buenos Aires SA over a maintenance fee on credit card accounts

Rating agencies weigh in

* Brazil's domestic banks could take a hit from the ongoing investigation into corrupt practices in the country's protein industry, Fitch Ratings said.

* The latest mortgage loan program launched by the Argentine government and three state-run banks, which is based on the new UVA inflation index, should help Argentina's banking sector meet an increased mortgage demand, Moody's said.

Industry news

* Chile's banking association Abif has submitted a proposal to bank superintendent SBIF regarding the provision of minimum services and emergency equipment during strikes.

* Argentina's central bank set new caps on the fees that banks can charge businesses on credit and debit card transactions.

* The Argentine government is finalizing details with banks, which will offer the loans under its Procrear housing scheme starting next week.

* The Brazilian senate will create a group that will assess the banking concentration in the country, given the belief that it is one of the factors behind the high level of banking spreads.

* A new bill would disallow Brazilian banks from charging fees on inactive consumer accounts.

In other news

* Banestes SA - Banco do Estado do Espírito Santo revoked its accreditation as an open market dealer given by the Brazilian central bank's open market operations department.

* Caixa said it has no plans to sell its assets this year to help raise funds to strengthen its capital levels.

* HSBC Bank Argentina SA's priority in 2017 is to expand its leasing portfolio in the country's rapidly changing financial environment, Patricia Bindi, the bank's commercial banking head, said.

Featured this week on S&P Global Market Intelligence

* Best of the Web: Central American governments are failing big with their fiscal policies; Mexico's largest Archdiocese has a few choice words for local companies willing to engage in building Trump's border walls; and Latin America's series of presidential elections provide an uncertain political outlook for the region.

* 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.