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Investment strategies; legal matters

Banking Essentials Newsletter - November Edition

University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

Estimating Credit Losses Under COVID-19 and the Post-Crisis Recovery

StreetTalk – Episode 70: Banks' Liquidity Conundrum Could Fuel M&A Activity


Investment strategies; legal matters

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

Investment strategies

* Itaú Unibanco Holding SA said it aims to expand its global private banking business by between 5% and 10% annually.

* Banco Santander (México) SA Institución de Banca Múltiple will allocate 15 billion Mexican pesos in its operations over the next three years, to be used for various strategic projects and the modernization of the bank's network of channels, systems and infrastructure.

* Citigroup Inc. is still planning to go ahead with its announced $1 billion investment program in Mexico despite growing uncertainties on U.S. President-elect Donald Trump's policy stance toward the Latin American country, according to the bank's CFO John Gerspach.

* Sumitomo Mitsui Banking Corp. plans to bolster its operations in Mexico as it expects Japanese companies to continue to expand into the country over the medium to long term.

Legal matters

* Brazil's antitrust regulator Cade reached a deal with Barclays Plc, Citicorp, Deutsche Bank SA – Banco Alemão, HSBC Holdings Plc and JPMorgan Chase & Co. who will pay 183.5 million Brazilian reais in fines regarding an investigation into the creation of an alleged cartel to manipulate offshore foreign exchange rates.

* Banco do Brasil SA and Caixa Econômica Federal signed an agreement with Brazil's Federal Public Ministry to control cash withdrawals tied to federal public funding in both state-run banks as part of a pilot program.

* Brazil's federal police launched an inquiry into a criminal scheme at Banco do Nordeste do Brasil SA's headquarters, where the bank allegedly approved irregular financing for the purchase of heavy machinery and incurred estimated losses of 41 million Brazilian reais.

Selling point

* Grupo Financiero Galicia SA said it is analyzing the possible sale of all its shares in Compañía Financiera Argentina SA, known as Efectivo Sí. The group's unit, Banco de Galicia y Buenos Aires SA, reportedly received four bids for the financial services business, including an offer from SACI Falabella.

* The Brazilian government is reportedly postponing until 2017 its plan to terminate its sovereign wealth fund and sell the Banco do Brasil's shares that make up the fund.

Rating agencies weigh in

* Moody's placed the outlook on Latin American banks for 2017 to negative, as weak economic growth impacts operating environments and asset quality and higher credit costs hit profitability.

* Banco Nacional de Desenvolvimento Econômico e Social's plans to ditch its image as the lender for the national champions of Brazilian industry, and home in more on its traditional role as a development bank, are positive for the lender, Moody's said.

* Investors and credit rating agencies have "overreacted" to the potential impact of Donald Trump's election in the U.S. on Mexican banks, said the head of Mexican banking regulator CNBV, Jaime González Aguadé.

In other news

* Banif - Banco Internacional do Funchal (Brasil) SA posted a net loss of 130.5 million reais in the third quarter. Banif is among a group of banks that was earmarked for additional supervision by Banco Central do Brasil in May due to financial stability threats.

* Mexico's banking system maintained reasonable capital levels when subjected to adverse scenarios in recent stress tests, but some institutions showed weakness under certain conditions, Banco de México said.

* Banco do Brasil signed an agreement to continue distributing its products and services through Brazilian postal service Correios' network for another 36 months.

* Brazilian banks cut 10,000 jobs in the aggregate period between January and October, up 58.4% from a year earlier.

Featured this week on S&P Global Market Intelligence

* LatAm bank M&A activity falls for 2nd consecutive year: M&A activity in the Latin American banking space continued on a downward trend in 2016, as the total number of announced deals fell to 14 from 15 in the previous year and 17 in 2014.

* Best of the Web: Latin America is in the midst of an energy revolution; Brazil's legislative and judiciary branches clash; and Venezuela mirrors the situation of pre-war Syria.

* Hires and Fires: Governor moves in the central banks of Argentina and Mexico.

* Ratings Roundup: Ratings upgrades for BHD International Bank (Panamá) SA, Popular Bank Ltd. Inc. and Banco de Reservas de la República Dominicana Banco de Servicios Múltiples.