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Brazil cuts Selic; Bradesco proposes capital hike

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Brazil cuts Selic; Bradesco proposes capital hike

* The Brazilian central bank's monetary policy committee unanimously decided to cut its Selic rate by 0.25 percentage point to 6.75% per year. The central bank said its baseline inflation scenario evolved as expected and remained favorable, adding that its inflation projections stand at around 4.2% in 2018 and 2019. In line with this, leading Brazilian banks have announced cuts in their lending rates for individuals and corporate clients, Diário Comércio Indústria & Serviços reported.

* Banco Bradesco SA said its board of directors will approve a capital increase of 8.00 billion Brazilian reais by issuing new shares to current investors, Reuters reported. The proposal, due to be voted at a March 12 shareholder meeting, aims to increase the liquidity of the bank's shares and improve the profits reserve balance.

MEXICO AND CENTRAL AMERICA

* The delinquency rate of Mexican banks' consumer credit portfolio rose slightly to 4.6% in 2017 from 4.3% a year earlier, El Economista reported, citing data from the ABM banking industry association. Consumer financing rose 8.5% last year to reach 981 billion Mexican pesos.

* Panama's SBP banking regulator has issued new rules for the handling of derivatives by the country's banks aimed at promoting adequate risk management controls in line with the Basel III standards, El Capital Financiero reported, citing a press statement.

BRAZIL

* Itaú Unibanco Holding SA is setting its sights on the retail market to grow its loan portfolio in 2018 as demand from larger companies is not seen picking up until next year, Diário Comércio Indústria & Serviços reported. The bank's total loan portfolio was 593.70 billion reais in the last three months of 2017, down slightly from 598.40 billion reais during the fourth quarter of 2016.

* BTG Pactual Group and Switzerland-based asset management company Capital Dynamics AG said they had signed an accord to distribute funds for institutional investors in Latin America, Reuters reported.

* Caixa Econômica Federal has a stock of 43.7 billion reais in unsecured loans granted to states and municipalities, which could require a greater allocation of capital for the bank to meet Basel III solvency requirements, Valor Econômico reported.

ANDEAN

* Peru's government is set to inject 130.0 million Peruvian soles into troubled state development bank Banco Agropecuario, or Agrobanco, for the short-term, to allow it to continue granting credit to small-scale farmers, Finance Minister Claudia Cooper told Congress, SEMANAeconómica reported. Meanwhile, the head of Peru's SBS financial regulator said Agrobanco lacked proper risk management controls, El Comercio reported.

* Peru's Finance Ministry is proposing revisions to renew an anti-graft law, under which it would only confiscate a "non-minority" of assets from companies that have either admitted or been convicted of corruption, Reuters reported. However, if companies enter into plea deals, such penalties would not be imposed.

* Juan Jose Echavarria, head of Colombia's central bank, said the regulator may cut its current benchmark rate of 4.5% if inflation reaches 3% in March, Reuters reported.

* Colombia's ELN rebel group will hold a national blockade beginning 6 a.m. Feb. 10 until 6 a.m. Feb. 13 to protest the government suspending peace talks, Reuters reported. "We call on transporters and passengers to abstain from traveling to avoid inconveniences," the group said in a statement. However, the government said they will defy the order and will continue to battle the ELN.

* Venezuela's National Assembly estimated monthly inflation for January at 84.2%, and at 4,068% for the year through January, Reuters reported. The newswire said the figures are mostly in line with that of independent economists.

* Venezuela set the date for presidential elections on April 22, where incumbent President Nicolas Maduro will most probably run for re-election, Reuters reported. Talks between the ruling party and the opposition held in the Dominican Republic failed as the opposition asked for the vote to be postponed to later in the year to give it more time to settle on a candidate.

* Banco de Bogotá SA is offering eight different corporate financing options for companies that must pay staff severance compensation, La Republica reported. The loans carry repayment terms of between two days and a year and the amount can be negotiated in line with borrowers' needs.

SOUTHERN CONE

* State-owned Banco de la Ciudad de Buenos Aires bought the remaining 20% stake in microfinance company Ciudad Microempresas S.A. from Corporación Buenos Aires Sur, making it the sole owner of the entity, BAE Negocios reported. Ciudad Microempresas was established in 2013 and has 9,000 credit clients.

* Argentine bank workers will strike Feb. 9, Feb. 19 and Feb. 20 in protest over the government's offers for inflation-tied salary adjustments of 9%, according to statements from union La Bancaria. Argentine banking association ABA will implement contingency plans to mitigate the impact of the strike, such as supplying more cash than usual to ATMs, El Cronista reported.

* Staff at Banco de la Provincia de Buenos Aires will also strike on Feb. 8 to protest reforms to the state-owned lender's pension fund, Clarín reported. A day later, members of the country's largest banking union will hold a nationwide strike over the reform as well as a deadlock in wage negotiations.

* Banco de la Provincia de Buenos Aires has also launched subsidized mortgage loans in UVA inflation-adjusted units aimed at younger customers wanting to buy properties valued at up to 66,000 UVAs, the equivalent of 1.3 million Argentine pesos, Clarín reported. Applicants must have saved at least 200 UVAs, the equivalent of 4,300 pesos monthly in one year to be eligible.

* Argentina sold one-year Argentine peso-denominated bonds on Feb. 7, together with 196-day and one-year Treasury notes, totaling $4.6 billion for all debt issuances, Reuters reported. The government received orders of $778.0 million for the 196-day notes and $526.0 million for the one-year notes.

* Spain's Banco Bilbao Vizcaya Argentaria SA, which recently agreed to sell its majority stake in Banco Bilbao Vizcaya Argentaria Chile SA to Bank of Nova Scotia, is reportedly considering whether to exit the South American country completely and sell its profitable car-financing operation Forum, Pulso reported, citing unnamed sources. The sources said the company would want about $1.00 billion for the company.

PAN LATIN AMERICA

* The World Bank has raised $1.36 billion by selling a multi-country catastrophe bond that will be used to insure Pacific Alliance countries Mexico, Colombia, Peru and Chile against earthquakes.

* High-yield corporate issuances for Latin America rated by Moody's totaled $27.2 billion in 2017, compared to $22.3 billion in the previous year. Brazilian oil firm Petrobras accounted for the bulk, with $17.6 billion in issued debt in 2017. The previous year saw 33 issuances from 24 companies, higher than the 24 issuances by 15 companies made in 2016.

* Fitch Ratings believes cyber insurance poses an opportunity for business growth and diversification for some insurers, and it is currently a profitable niche market segment. However, it can also be a credit negative to others because of the possibility of future losses, and as the market grows and becomes more competitive, the opportunity for profits will go down. Additionally, new entrants are at higher risk of underpricing risks.

IN OTHER PARTS OF THE WORLD

* Middle East & Africa: QNB secures $3.5B syndicated loan; Moody's places Angola on review for downgrade

* Europe: SoftBank in talks for Swiss Re stake; Commerzbank, SocGen report Q4 results

Helen Popper 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.