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Banks behaving badly; holiday shopping

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Banks behaving badly; holiday shopping

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

Banks behaving badly

* Banco Bradesco SA will pay more than 111 million Brazilian reais to three local pension funds amid an investigation, known as Operation Greenfield, on alleged irregularities in pension funds.

* A Uruguayan judge sentenced the former president of Banco de la República Oriental del Uruguay, Fernando Calloia, to 20 months in prison for official misconduct over irregularities in the granting of a loan by the state-run bank to Spain-based airline company Cosmo.

* Brazil's federal prosecutors office is pushing for the immediate replacement of all of Caixa Econômica Federal's vice presidents after finding "irregularities" at the state-controlled bank.

* Brazilian authorities launched an operation that will investigate "indications of fraudulent management" in credit agreements between Banco do Nordeste do Brasil SA and Grupo Petrópolis, a Brazilian brewery company. The operation, called Caixa 3, stems from irregularities found in Banco do Nordeste's granting of loans totaling 827 million reais to the brewery for the construction of two beverage factories.

Holiday shopping

* Banco de Credito e Inversiones SA signed a definitive agreement to fully acquire retail giant Wal-Mart's Chilean financial division for approximately 92.01 billion Chilean pesos.

* Mexico's Gentera SAB de CV said it has agreed to acquire a minority interest in ConCrédito, a local multipurpose financial institution comprised of Fin Útil SA de CV SOFOM ENR and Comfu SA de CV.

* Grupo Financiero Banorte SAB de CV expects Mexico's federal competition commission to authorize its merger with Grupo Financiero Interacciones SAB de CV by the end of the second quarter of 2018, said Banorte CEO Marcos Ramírez.

Year-end resolutions

* Shareholders approved Grupo Financiero Galicia SA's proposed split-off transaction with banking unit Banco de Galicia y Buenos Aires SA.

* Banco de Comercio Exterior de Colombia SA – BANCÓLDEX on Jan. 21, 2018, will begin operating under Grupo Bancóldex, a new structure in which the company and its subsidiaries will act as a single economic group.

* Credicorp Ltd. and banking unit Banco de Crédito del Perú are getting new chief executives as part of a broader management restructuring across the financial group.

In other news

* Banco Indusval SA posted a net loss of 74.9 million reais for the third quarter as the bank continued to reduce its credit portfolio and bolster its allowance for loan losses.

* Banco Nacional de Desenvolvimento Econômico e Social said it expects to complete on Dec. 22 the renegotiation of 8.2 billion reais in the debts of 14 states.

* Banco do Estado do Rio Grande do Sul SA teamed up with Icatu Seguros SA to establish a company that will have a 20-year exclusivity in the marketing of the bank's capitalization products.

* Employees of Argentina's state-run Banco de la Provincia de Buenos Aires held a 48-hour strike to protest the bank's pension reform, which includes raising the retirement age of its staff to 65 years.

* Brazil's Supreme Court approved the agreement struck by large local banks to compensate depositors who suffered losses due to the government's anti-inflation plans in the 1980s and 1990s. The agreement contributes to the stability of the country's financial system, a central bank representative said. Meanwhile, Moody's said the agreement is credit positive for the country's largest lenders.

* Brazil's National Monetary Council approved the maximum coverage of 1 million Brazilian reais for guarantees paid by the country's deposit insurance program, known as FGC, fund for each depositor or investor. The new rule was earlier approved by financial institutions contributing to the FGC.

* Brazilian consumer credit demand rose 3.9% in November from the year-ago period, according to data from credit research firm Boa Vista SCPC. Meanwhile, credit demand from Brazilian businesses popped 9.5% year over year in November, according to Serasa Experian.

* The number of Brazilian consumers in default rose 1.91% year over year to 61.1 million in November, with the total of overdue debt topping 270.5 billion reais, Serasa Experian said.

Featured this week on S&P Global Market Intelligence

* Capital ratio evolution varies for major banks in Latin America: Major Latin American banks differed in terms of the evolution of their common equity Tier 1 ratios in the 12 months through Sept. 30, with almost half the lenders in a sample analyzed by S&P Global Market Intelligence posting declines.