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Trouble in Venezuela; legal briefs


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Trouble in Venezuela; legal briefs

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

Trouble in Venezuela

* Venezuela has defaulted on a $1 billion debt to Russia, Latin American Herald Tribune reported, citing Russia's audit committee. Meanwhile, an anonymous person requested the International Swaps and Derivatives Association, or ISDA, to look into Venezuela's reported efault on Russia and whether it could trigger a broader default.

* Venezuelan state-run lender Banco De Venezuela SA Banco Universal is reportedly looking to sell $5 billion of sovereign bonds due 2036 to a number of Wall Street funds at a discount of up to 80%.

* Executives of Goldman Sachs Group Inc.'s unit Goldman Sachs Asset Management LP were reportedly informed of the company's controversial purchase of Venezuelan state oil company bonds only after the deal had been completed.

* Venezuelans will vote July 30 to elect delegates to a new assembly tasked with rewriting the nation's constitution in what the opposition has called a maneuver designed to cement the power of left-wing President Nicolás Maduro.

Legal briefs

* BBVA Banco Francés SA said it will make a provision of 1.19 billion Argentine pesos due to an ongoing legal dispute with the Argentine tax authorities over income tax for 2016, which will be reflected in this year's second-quarter earnings.

* Peruvian state-controlled development bank Corporación Financiera de Desarrollo SA revealed its credit exposures for loans tied to scandal-plagued Brazilian construction giant Odebrecht and Graña y Montero, Peru's biggest construction firm, which is under investigation for alleged bribery frauds.

* Brazilian President Michel Temer signed a provisional measure increasing the maximum fine amount the central bank can levy against financial institutions for violations to 2 billion Brazilian reais from 250,000 reais.

* Argentine banks will see a new norm implemented in coming days to help them detect money laundering and terrorist-financed operations. Under the measures, banks will segment their customers using a risk-based approach that will help them identify suspicious operations.

* Grupo Financiero Banorte S.A.B. de C.V. denied Mexican media reports about the bank having lost 617 million Mexican pesos on the bankrupt oil services firm Oceanografía, as the amounts were already written off in 2014.

IPO highlights

* More medium-sized Mexican banks could launch initial public offerings in the short and medium term despite a volatile economy and lower growth rate in the country, Fitch Ratings said.

* Banco del Bajío SA priced its initial public offering at 29.50 Mexican pesos per share, near the lower end of its 29 pesos to 32 pesos per share price range.

In other news

* Banco Central de Chile's governor has called on lenders to start adopting Basel III standards amid uncertainty over when the country's new general banking law will be passed.

* Banco Comafi SA completed its acquisition of Argentina-based Deutsche Bank SA from Germany's Deutsche Bank AG.

* Banco Central de la República Argentina granted a banking license to the country's first fully digital bank, which should launch operations by the end of the year.

* The recent political crisis in Brazil has not yet impacted credit demand at state-owned Banco do Brasil SA, said the bank's CEO Paulo Caffarelli.

* Caixa Econômica Federal signed a cooperation agreement with industry confederation CNI to boost access to credit for micro-, small- and medium-sized enterprises, and will offer more than 1 billion Brazilian reais in credit. Meanwhile, Banco Nacional de Desenvolvimento Econômico e Social, or BNDES, said it wants to increase its annual disbursements of short-term working capital loans for small and medium-sized enterprises to 12 billion reais in the second half of the year.

* BNDES is also considering relaxing its rules for investments in mutual funds as it looks to combat difficult market conditions.

* Banco de Crédito del Perú has had to adjust its business strategy to focus on improved efficiency to cushion its profitability against weakening economic growth in the country, Moody's said.

* Consumer delinquencies in Brazil fell 3.8% month over month in May, according to data from credit research firm Boa Vista SCPC.

Featured this week on S&P Global Market Intelligence

* Best of the Web: Latin American leaders are inclined to rewrite constitutions; Venezuela's political crisis has been years in the making; and Mexico's call to buy local has yet to gain traction.

* 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.