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Brazil's Banco Postal shuts down; S&P cuts Bolivia's outlook

* Banco Postal, a bank that was operated in partnership with Brazilian state-owned postal service Correios and Banco do Brasil SA, has halted operations after their agreement expired Dec. 15, Valor Econômico reported. Both parties are studying the renewal of the agreement, but without the exclusivity clause. Following the expiration, Banco do Brasil signed a temporary agreement with Correios to provide banking correspondent services for another three months.

* S&P Global Ratings revised its outlook on Bolivia to negative from stable as the country continues to grapple with political uncertainty since the October elections. Evo Morales' resignation as president and a subsequent change in leadership have weakened Bolivia's macroeconomic pillars, leading to higher government debt and potentially greater vulnerability to negative external shocks, S&P said.

MEXICO AND CENTRAL AMERICA

* Analysts polled by Reuters expect Mexico's central bank will cut the benchmark rate to 6.50% during its next policy meeting scheduled for Dec. 19. The rate is currently at 7.50%.

* Mexico's government raised the daily minimum wage by 20% to 123.22 pesos for 2020, Reuters reported. Economists at JPMorgan warned that wage hikes have usually been tied to productivity, and this wage hike may lead to "economic imbalances."

* Guatemala's finance ministry said the stock market in El Salvador was expected to start offering Guatemalan sovereign bonds to local investors this year as part of a partnership between the neighbors' bourses, Prensa Libre reported, quoting Finance Minister Víctor Martínez. He said the exact conditions of the issuance were still being studied.

* Mexico's central bank has rejected 70% of the 4,600 requests made by the country's banks to raise commissions this year, El Economista reported, citing data from the monetary authority.

BRAZIL

* Moody's said that XP Inc.'s recently completed IPO is credit positive for the Brazilian financial services firm because it will provide backing for its growth strategy and allow it to launch its new digital banking platform. The banking operations will then allow XP to provide more products that can complement its strong online investment advisory business at a lower cost than traditional banks.

* Banco Pine SA said 10,399,359 common shares and 12,658,975 preferred shares were subscribed during the preemptive rights period for a capital increase, at an issue price of 3.34 reais each. The shares total about 76.90% of the maximum amount of the capital increase of about 100.1 million reais.

* Itaú Unibanco Holding SA's card unit Redecard SA has extended a zero levy on advance credit card payments for retailers who do not have a checking account at the bank in response to an order by the Cade competition watchdog, Valor Econômico reported. Cade ruled that the campaign should either be extended to non-account holders or be scrapped within 10 days.

ANDEAN

* The cost of consumer borrowing in Peru during the Christmas holiday season has fallen by four percentage points from last December to reach 40.35%, with even bigger drops in loans by retail banks, Gestión reported, citing data from the SBS banking regulator.

SOUTHERN CONE

* The Argentine peso weakened by 9% against the dollar in the parallel exchange market on Dec. 16 following the government's announcement that it would slap a 30% tax on foreign card payments and hike soy export taxes, Clarín reported. The so-called blue peso closed at 72.50 per dollar, widening the gap with the official interbank rate of 59.82 pesos per dollar from 8% to 15%.

* Argentine investment fintech Quiena Inversiones has launched operations in Chile with an initial capital of $1.2 million, Diario Financiero reported. The company aims to have 6,000 clients within the first year of activity.

* Chile's Finance Ministry said it would propose the reappointment of Rosanna Costa as a central bank director for a second 10-year term, Diario Financiero reported. If the Senate confirms her term extension, the newspaper said she would be in pole position to succeed Mario Marcel as president of the institution in 2021.

PAN LATIN AMERICA

* Moody's said economic growth in Brazil and Mexico should be able to support the performance of their respective structure finance sectors by next year. Brazil's recovering economy and historically low interest rates will help boost the credit quality of new collateral and the performance of existing deals. Meanwhile, Mexico's recovery should be able to cushion high credit quality for new originations and maintain the performance for existing transactions. Meanwhile, the Argentine recession is seen to take a toll on the sector's prospects in 2019.

IN OTHER PARTS OF THE WORLD

* Asia-Pacific: South Korea OKs 3rd internet bank; Australia launches Westpac probe

* Middle East & Africa: NCB, Riyad Bank drop merger talks; Groupe BPCE to sell stake in Tunisian bank

* Europe: Big UK banks pass stress test; UBS to revamp unit; UniCredit off-loads bad loans

Helen Popper contributed to this article.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.

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.