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Mercado Libre ventures into banking; Falabella to merge bank, cards units

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Mercado Libre ventures into banking; Falabella to merge bank, cards units

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

Banking on banking

* Argentine e-commerce company Mercado Libre plans to expand into digital banking services with a new online investment platform, which will be called Mercado Fondos. The new service includes a partnership with Buenos Aires-based Banco Industrial SA.

* Financial technology firm Creditas Soluções Financeiras Ltda. applied with Banco Central do Brasil to become a financial institution. Among the company's plans is to offer a secured credit line that is cheaper than those provided by banks, said Sergio Furio, the firm's founder and president.

Play your cards right

* Latin American retail giant S.A.C.I. Falabella will merge its Chilean bank affiliate Banco Falabella with its cards business, CMR Falabella SA, in a move that will create Chile's largest credit card issuer. The restructuring will see Banco Falabella take over around 3 million CMR credit card accounts along with Falabella loyalty program cards, which has about 1.2 million customers.

* Banrisul Cartões SA, the card payment unit of Brazil's Banco do Estado do Rio Grande do Sul SA, filed for an initial public offering of its preferred shares. The card company has reportedly been valued at about 2.5 billion reais during the company's initial discussions with investors for the IPO.

* Stone Pagamentos SA reportedly started hiring banks to coordinate its planned initial public offering in New York. The Brazilian credit card processing company was reportedly valued at about 2.27 billion reais in October 2017.

Building a cyberwall

* Mexican banks and regulators have formed an information security task force in the wake of multiple cyberattacks on the country's financial system. The central bank noted that 80% of banking transactions are operating normally within its payment system following the cyberattacks.

* Chilean banking regulator SBIF said it is continuing to monitor Banco de Chile following a May 24 system failure, which was caused by a computer virus. The SBIF said it will monitor the bank on an ongoing basis with a focus on its management of operational risks.

A change of heart

* Credicorp Capital Chile is investing $100 million in a new three-year program, as it transforms from a boutique investment bank to a regional bank operating both in investment and private banking.

* Japan's MUFG Bank Ltd. is converting its Argentine branch, Bank of Tokyo-Mitsubishi UFJ Ltd. - Sucursal Buenos Aires, into a representative office that will be controlled by the bank's New York subsidiary. The decision will see headcount at the Buenos Aires location fall to about 20 from 48 as of December.

The bottom line

* Argentina's BBVA Banco Francés SA saw its first-quarter net income grow 178.3% annually; while Chile-based Grupo Security SA's profits rose 36.2%.

Featured this week on S&P Global Market Intelligence

* NAFTA and elections aside, Citi CEO sees bright future in Mexico: Citigroup Inc. CEO Michael Corbat acknowledged possible threats to the Mexican economy, but he said the banking giant's business there should continue to be a vital growth driver.

* Hires and Fires: A weekly rundown of executive management, board and other personnel moves at Latin American financial institutions.

* Ratings Roundup: A summary of various ratings actions on Latin American financial institutions and economies.