S&P Global Market Intelligence presents the week's latest news and trends in Latin American banking.
Central bankers in action
* Banco Central do Brasil increased its GDP growth forecast for 2019 to 0.9% from 0.8%, pointing toward better-than-expected economic performance in the second quarter. The bank also said it expects growth to accelerate to 1.8% in 2020, but a high degree of uncertainty remains.
* Banco Central de Reserva del Perú changed the way it sets the maximum interest rates that can be charged by non-financial entities, including financial technology firms. Under the new measure, the maximum rate will be based off of the average rates on loans to both small enterprises and consumers.
* Marking a slight relaxation of its recently implemented currency control, Argentina's central bank said it will allow companies that were able to renegotiate debt expiring prior to Aug. 30 to refinance that debt through the issuance of new bonds.
* Colombia's central bank raised its 2019 forecast for domestic GDP growth to 3.2% from 3.0%, while keeping its benchmark interest rate steady at 4.25%.
* Banco Central del Paraguay's monetary operations executive committee, CEOMA, unanimously decided to lower its benchmark interest rate by 25 basis points to 4.00%, marking its third consecutive cut.
* Members of the Chilean central bank's monetary policy board considered reducing the monetary policy rate by as much as 75 basis points, a decision that would have brought the rate below 2%. However, the board ultimately decided to lower the rate by 50 basis points to 2%.
Regulatory
* Uruguay's government presented a bill in Congress to join the Asian Infrastructure Investment Bank, or AIIB, in an effort to widen its potential financing sources as it is faced with limited credit from the World Bank. The country would reportedly need to contribute $5 million in capital to join the bank.
* Ricardo Monreal, the Mexican Senate's majority leader, said the chamber plans to approve by December a revised bill to reduce fees in the country's banking sector.
* Brazil's central bank ordered an extrajudicial liquidation of Rio de Janeiro-based brokerage UM Investimentos SA Corretora de Títulos e Valores Mobiliários, citing the "serious equity situation" at the entity.
Ventures and investments
* Chile's Banco de Credito e Inversiones SA plans to establish a new banking unit in Peru, to be called Banco BCI Peru, as part of the company's broader international expansion strategy. The company also announced that it would purchase Florida-based Executive Banking Corp. through its City National Bank of Florida subsidiary, representing an investment of US$75 million.
* Banco Santander México SA is investing $57.5 million in financial technology startup Klar, through its venture capital fund Santander Innoventures.
* Banco do Brasil SA and Switzerland-based UBS Group AG signed a nonbinding memorandum of understanding for a strategic partnership to provide investment banking and institutional securities brokerage services in select South American countries.
In other news
* The World Bank will grant US$50 million to Banco Finandina SA to bolster the Colombian bank's technological capacity.
* Bank for International Settlements rolled out a U.S. dollar-denominated green bond fund to help central banks adopt environmental sustainability objectives in the management of their reserves.
* U.S. President Donald Trump said the U.S.-Mexico-Canada trade agreement may be delayed if Congress pursues an impeachment inquiry into Trump over alleged abuse of power. The statement sent Mexico's currency and stock market plummeting.
* Credicorp Ltd., which operates in Peru through banking unit Banco de Crédito del Perú, said its board approved a special cash dividend of about 755.1 million Peruvian soles, equivalent to 8.00 soles per share.
* Banco do Brasil's board decided that the bank will sell up to 64 million shares currently held in treasury in a follow-on offering if Brazilian investment fund FI-FGTS opts to sell its stake in the company. The investment banks tasked with coordinating the offering plan to launch it Oct. 3 and price it by Oct. 17.
* According to Mexico's central bank, most of the 33 banks required to participate in Mexico's new digital payment platform CoDi are ready for the Sept. 30 nationwide launch of the system.
* A group of 130 global banks have adopted the United Nations-backed Principles for Responsible Banking, which require companies to assess their impact on the environment and set targets to improve. Brazil's Banco Bradesco SA was among the banks that led the development of the principles.
* The central bank of Guyana decided not to approve the sale of Bank of Nova Scotia's banking operations in the country to Republic Financial Holdings Ltd., according to an email from Bank of Guyana Governor Gobind Ganga.
Featured this week on Market Intelligence
* 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.
