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Bancomext-Nafin merger plan criticized; Banco de Occidente names president

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Bancomext-Nafin merger plan criticized; Banco de Occidente names president

* Banco Nacional de Comercio Exterior SNC Institución de Banca de Desarrollo CEO Francisco González said Mexican President-elect Andrés Manuel López Obrador's proposal to merge the bank with fellow state-run development bank Nacional Financiera SNC Institución de Banca de Desarrollo would have numerous negative consequences, including lower credit ratings for both companies, El Financiero reported. A Bancomext-Nafin merger, which was attempted in 2005 but later shelved, would likely lead to weaker credit demand, the executive said.

* Colombia's Banco de Occidente SA appointed César Prado Villegas as its new president, replacing Efraín Otero Álvarez, La República reported. Otero Álvarez resigned in August after around 23 years as the company's president.

MEXICO AND CENTRAL AMERICA

* Fitch Ratings revised its outlook on Consubanco SA Institución de Banca Múltiple to stable from negative, citing stronger liquidity risk management and an improvement in the bank's profitability in the first half of 2018.

* Mexican insurers are strong enough to weather possible challenges that could come with the government shift following the recent presidential election as well as changes in the country's general macroeconomic conditions, Fitch Ratings said. The rating agency expects moderate growth and sufficient capital and reserves to support Mexico's insurance sector.

* A proposal by Mexican President-elect Andrés Manuel López Obrador to eliminate insurance coverage for high-ranking government officials could have an impact of $2.5 billion on the reserves of Mexico's insurance sector, El Financiero reported, citing analysts from Fitch Ratings. An earlier report said MetLife México SA could lose a 2.71 billion pesos contract with the government if the president-elect follows through with the plan.

* Mexico's Banco del Ahorro Nacional y Servicios Financieros SNC will launch an electronic banking service in the second half of October, El Economista reported, citing Director General Virgilio Andrade Martínez.

BRAZIL

* Alexandre Cordeiro, the head of Brazilian antitrust regulator Cade, defended the agency's decision to approve Itaú Unibanco Holding SA's acquisition of a stake in brokerage firm XP Investimentos SA. In an interview with Valor Econômico, he said Cade, like Brazil's central bank, approved the deal without allowing a change in XP's control.

* Banco Bradesco SA is looking to double its portfolio of individual micro-entrepreneur clients from the current 1.5 million clients and has already pre-approved 20 billion reais of loans for the segment, O Estado de S.Paulo reported.

* The Brazilian real has tumbled far enough to correct the country's current account deficit, but the Argentine peso may need to fall further, according to a study by Bloomberg Economics. The Argentine peso has seen inflation-adjusted depreciation of 33% so far in 2018, but would need a decline of 51% to wipe out the country's deficit.

ANDEAN

* Venezuela is allowing private banks and foreign exchange houses to sell dollars at a single, fluctuating rate as part of measures to ease currency controls that have been in place since 2003, Bloomberg News and Reuters reported. The government will create a new platform to determine the exchange rate. Previously, dollars could only be legally purchased from the central bank to regulate the sale of hard currency.

* Victor David Segura, the head of Colombia's United Guerrillas of the Pacific, or GUP, was killed in a clash with armed forces, Reuters reported, citing Colombian President Ivan Duque. The GUP is a group of former Marxist rebels who refused to join a peace deal between the government and other rebel groups.

* Following a report that U.S. officials discussed a coup to overthrow Venezuelan President Nicolas Maduro with Venezuelan military officers, the South American country's foreign minister accused the U.S. of plotting an intervention and assisting military conspiracies, Reuters reported.

* The Peruvian government will approve before the end of the year the creation of the Fondo Crecer fund, which will act as a financing channel for micro, small and medium-sized enterprises, Gestión reported.

SOUTHERN CONE

* Chile's central bank is ready to raise interest rates but is concerned that the U.S.-China trade dispute and the risk of a sustained fall in copper prices could make such tightening more difficult, Reuters reported. "We don't want to get behind the curve in relation to inflation," central bank Governor Mario Marcel told the news agency. "The sooner we start [raising rates,] the more gradual it can be," he said.

* Argentine central bank Governor Luis Caputo said government funding "will be more than sufficient for 2019" but did not provide details on the funding sources, Reuters reported. "There is no doubt that there is an over-exaggeration" with the high yields on the country's sovereign debt, he said, adding that "this is going to correct itself quicker than markets believe."

* A Chilean government delegation recently traveled to Israel to gain a better understanding of how the Middle Eastern country works to prevent cyberattacks, Diario Financiero reported. Multiple data breaches have hit Chile's banking sector in recent months, resulting in the theft of funds and the leaking of credit card data.

* An analysis by Nomura Holdings Inc. listed Argentina among seven emerging economies that are at risk of an exchange-rate crisis, Bloomberg News and the Financial Times reported. Sri Lanka is most at risk, followed by South Africa and Argentina.

PAN LATIN AMERICA

* The U.S. said it recalled its top diplomats from the Dominican Republic, El Salvador and Panama over the three countries' decisions to cut diplomatic relations with Taiwan in favor of China, Reuters reported.

* The credit quality of global sovereigns shows limited vulnerability to the exposure of nonfinancial companies to higher borrowing costs, according to Moody's. The risk to sovereign creditworthiness is generally limited by economic, fiscal and capital buffers, the rating agency said.

IN OTHER PARTS OF THE WORLD

* Asia-Pacific: ICBC gets nod for Austrian unit; India fines 3 lenders; Axis Bank names CEO

* Middle East & Africa: Bahrain's Al Baraka eyes 2019 share offering; Zimbabwe names new finance chief

* Europe: Lloyd's confirms Neal as CEO; probe looking into $150B of Danske transactions

Pablo Jimenez Arandia 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. Links are current as of publication time, and we are not responsible if those links are unavailable later.