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Tuesday, January 19, 2010
Today's News Headlines
* IDB board to gather before Cancún meeting to fine-tune capital increase - Regional
* Moody's assigns first-time ratings to Banco Sáenz - Argentina
* Allianz closes purchase of stake from Itaú Unibanco - Brazil
* Moody's affirms Su Casita RMBS ratings, removes negative review - Mexico
* Central bank changes clearing system to improve efficiency, competition - Brazil
* Private sector banks book US$92.1mn loss in 2009 - Uruguay
* Doral shareholders to vote on common stock increase Feb 9, may point to acquisitions - Puerto Rico
* Fitch ups Ford Credit ratings, debt - Mexico
* NCB ratings placed on creditwatch developing by S&P - Jamaica
* BB says US$1bn bond issue abroad met strong investor demand - Brazil
* Factorline aims to enter banking business, re-enter consumer finance - Chile
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* IDB board to gather before Cancún meeting to fine-tune capital increase - Regional
The Inter-American Development Bank's (IDB) board of governors will gather before the bank's annual meeting in Cancún, Mexico at the end of March to fine-tune the details of a proposal for its ninth capital increase as well as the institutional strategy and results, Susana Sitja, senior modernization of the state specialist at IDB's office of strategic planning and development effectiveness, told BNamericas.
Last March the board of governors - IDB's top policymaking body, where all member countries are represented - called for an assessment of the need to add resources to the bank's ordinary capital and the fund for special operations, its source for concessional lending to the region's poorest countries. The capital increase is expected to come close to US$175bn, or more than double the bank's existing capacity.
Last week, IDB completed what it described as a far-reaching public consultation related to its proposed capital increase, a process that began on September 8 last year.
About 500 civil society organizations in the Americas and Europe participated in the consultation process. During the period, management met with organizations in the US, Europe and Latin America and the Caribbean, and conducted face-to-face meetings in seven countries.
"The public consultation focused on three aspects: the bank's institutional strategy, the institution's comparative advantages and the IDB's agenda to become a more effective and efficient institution," Sitja said.
Civil society organizations provided suggestions ranging from increased support for the private sector to greater emphasis on urban development, community participation in projects and an expansion of poverty alleviation programs.
"Suggestions and comments made by civil society regarding the bank's capital increase through eleven public consultations and the bank's website are being systematized in a document that will be sent to the board of executives and the board of governors, so that they [serve as] material for their discussions about the final structure of the capital increase," she said.
IDB hired a non-profit firm with vast experience in dialogue and consultation processes to handle the information. The bank's management has already taken several comments made by civil society about poverty and inequality reduction, climate change and renewable energy to its institutional strategy that will be proposed with the capital increase, according to Sitja.
By Jorge Porter
Business News Americas
* Moody's assigns first-time ratings to Banco Sáenz - Argentina
Moody's has assigned a bank financial strength rating (BSFR) of E+ to Argentina's Banco Sáenz.
Moody's also assigned long and short-term global local currency deposit ratings of B2 and Not Prime, as well as long and short-term foreign currency deposit ratings of Caa1 and Not Prime.
In addition, Moody's assigned an A1 local currency deposit rating and a Ba1 foreign currency deposit rating in the Argentine national scale. The outlook on all the ratings is stable, the agency said in a report.
Moody's said the E+ BFSR rating reflects Banco Sáenz's modest, specialized consumer finance franchise, which is primarily focused on financing personal loans and credit cards to clients of its sister company, Frávega, a leading home appliance retail chain in Argentina. Most of the bank's loans originate in Frávega's stores, making the bank highly dependent on the retail chain.
However, the bank's dependence in terms of earnings is less important as the majority of the bank's portfolio is not linked to consumer loans granted in Fravega's stores - given that these are securitized - but to credit card and commercial lending.
The ratings also incorporate Banco Sáenz' poor asset quality, a consequence of its credit card portfolio and, in particular, its active role in the securitization market, which in turn benefits the bank's capitalization.
Banco Sáenz is headquartered in Buenos Aires, and it had assets of 421mn pesos (US$112mn) and deposits of 258mn pesos as of September 2009.
To read the full report in English, go to this link (http://www.bnamericas.com/research_detalle.jsp?idioma=I&documento=1012206&id_sector=0)
To read the full report in Spanish, go to this link (http://www.bnamericas.com/research_detalle.jsp?idioma=E&documento=1012206&id_sector=0)
By Business News Americas staff reporters
* Allianz closes purchase of stake from Itaú Unibanco - Brazil
Germany's Allianz has acquired the outstanding 14% of its Brazilian subsidiary Allianz Seguros that was held by Itaú Unibanco (NYSE: ITUB), Allianz said in a statement.
The deal was announced in late December last year when Itaú Unibanco - Brazil's largest private sector bank - said it had reached an agreement to sell its stake for about 109mn reais (US$62mn) to Allianz South America.
The transaction was closed on January 14 and has been submitted to regulatory authorities for respective approval, the statement reads.
For 2010 Allianz Group economists forecast Brazil's GDP will grow by 5%. "Major sports events in the years ahead, such as the soccer World Cup in 2014 and the Olympic Games in 2016, not to mention the huge infrastructure works already planned to take place, will further accelerate the country's development."
Allianz Seguros ranks among the top seven P&C insurers in Brazil with a market share of 5.6%, according to the statement. From January to September 2009 Allianz Seguros reported 1.4bn reais in gross written premiums, up 26.5% on the same period the year before. The company also sells group health insurance.
By Business News Americas staff reporters
* Moody's affirms Su Casita RMBS ratings, removes negative review - Mexico
Moody's has affirmed the global local currency and national scale ratings of 16 certificates from 11 residential mortgage-backed securitizations (RMBS) issued by Mexican mortgage and construction lender Hipotecaria Su Casita.
The ratings action, after which none of Su Casita's rated domestic RMBS remain on review for possible downgrade, is primarily based on a recently announced change in Su Casita's procedure for calculating mortgage delinquencies, Moody's said in a statement.
The ratings on the certificates had been placed on review for possible downgrade in May and October 2009, due to concerns about the accuracy and consistency of the reported delinquency percentages in Su Casita's monthly servicing reports.
To read the full statement in English, go to this link (http://www.bnamericas.com/research_detalle.jsp?idioma=I&documento=1011625&id_sector=0)
To read the full statement in Spanish, go to this link (http://www.bnamericas.com/research_detalle.jsp?idioma=E&documento=1011625&id_sector=0)
By Business News Americas staff reporters
* Central bank changes clearing system to improve efficiency, competition - Brazil
Brazil's central bank BCB has widened access to its Selic clearing system to increase the number of system participants, BCB said in a statement.
The changes are aimed at making the Selic system more efficient, boost competition among system participants and increase liquidity in the local financial market, said BCB.
The new rules allow non-bank entities such as brokers, dealers and credit cooperatives to open accounts at the central bank for direct transactions of securities.
Before the change, such institutions could only access the Selic system through banks holding accounts with BCB.
By Business News Americas staff reporters
* Private sector banks book US$92.1mn loss in 2009 - Uruguay
Uruguay's private sector banks posted a combined 1.80bn-peso (US$92.1mn) loss in 2009, compared to a 484mn-peso profit the year before, according to central bank figures.
The 12 banks' net interest income was 8.23bn pesos last year, up 0.98% compared to 2008. Higher administrative expenses generated a 787mn-peso operating loss in 2009, compared to a 2.17bn-peso operating profit in the previous year.
Fee income rose 26.1% to 2.53bn pesos, while provisions fell 47% to 294mn pesos, according to the central bank's report.
Net loans hit 173bn pesos as of December 31, increasing 8.43% from a year prior. The past-due loan ratio worsened to 1.01% as of the same date, from 0.83% 12 months prior.
Gross bank loans and deposits denominated in US dollars amounted to 75.9% of total loans and 82.5% of total deposits, respectively, as of December 31, compared to 81.4% and 86.1% at the same time last year.
Private sector banks strengthened their combined equity by 7.19% to 21.8bn pesos in the year, ended December 31.
Their assets totaled 228bn pesos at the same date.
The Uruguayan banking system is dominated by state-owned banks BROU and BHU.
By Business News Americas staff reporters
* Doral shareholders to vote on common stock increase Feb 9, may point to acquisitions - Puerto Rico
The board at Puerto Rico's Doral Financial Corporation (NYSE: DRL) has called for a special meeting of shareholders to be held on February 9 to vote on a proposal to increase the number of authorized shares of the company's common stock to 300mn from 97.5mn, Doral said in a proxy statement.
Doral said the additional authorized shares of common stock will be available for issuance at the discretion of the board for any corporate purpose, including stock splits, stock dividends, redemption and exchanges, public or private stock offerings or acquisitions.
"We continue to explore opportunities for growth and expansion both organically and by acquisition, including FDIC-assisted acquisitions for banks which fail and are placed in receivership," the statement reads.
While Doral said that at this moment it does not have any specific commitments or agreements related to acquisitions, the board believes it would be desirable for shareholders to approve this proposal at this time so that the company is prepared to take advantage of possible acquisition opportunities that may arise in the future without being delayed.
Shareholders will also vote on a proposal to approve the number of authorized shares of Doral's capital stock to 340mn from 137.5mn and, conforming to the rules of the NYSE, vote on the potential issuance of up to 25mn shares of Doral's common stock in connection with the proposed exchange offer of the company's series A, B and C preferred stock, and 4.75% convertible preferred stock. The potential issuance would be in excess of 20% of Doral's outstanding common stock.
Only shareholders on record as of January 25 by the end of the business day are entitled to vote at the meeting.
Doral - once the island's largest mortgage lender - focuses on residential mortgage, consumer and small business lending throughout 41 branches in Puerto Rico. It is 78% owned by private equity group Doral Holdings Delaware.
By Business News Americas staff reporters
* Fitch ups Ford Credit ratings, debt - Mexico
Fitch has increased the national scale long and short-term credit ratings on multiple purpose finance company (Sofom) Ford Credit de México (FCM) to BBB from BB- and F3 from B, respectively, and revised the outlook on the long-term ratings to positive from negative.
The agency said in a statement that it also increased the rating on the FCM's short-term debt program to F3 from B.
The increase is due to Fitch's recent upgrade to B+ from B- of the international scale long-term senior unsecured debt of Ford Motor Credit Company, which unconditionally guarantees the domestic issues of FCM.
FCM's credit ratings are also based on the intrinsic strength of its local operations, good financial structure, increasing levels of capitalization and adequate loan book quality, although the latter is currently deteriorating, the agency said.
To read the full statement in Spanish, go to this link (http://www.bnamericas.com/reports/133569.pdf)
By Business News Americas staff reporters
* NCB ratings placed on creditwatch developing by S&P - Jamaica
Standard & Poor's has placed its CCC/C ratings on Jamaica's National Commercial Bank (NCB) on creditwatch developing following the agency's revision of Jamaica's sovereign rating to SD from CCC/C, due to its new domestic debt exchange program which S&P believes will have an impact on NCB's financial profile.
"The ratings on NCB were placed on creditwatch developing, signaling that the ratings could be upgraded, downgraded or remain at the current level. In this sense, if the bank's liquidity and asset quality are affected by Jamaica's domestic debt-exchange program, the ratings could be lowered," said S&P credit analyst Alfredo Calvo.
"However, if the bank is able to steer its way through Jamaica's turbulent economic situation while maintaining an adequate financial performance, the ratings could be maintained or upgraded up to Jamaica's sovereign credit rating level," he said.
S&P's ratings revision on Jamaica to SD due to its domestic debt-exchange program could affect the bank's future performance, especially considering NCB's large exposure to Jamaican sovereign-debt securities and loans to public entities, which accounts for 57% of its total investment and loan portfolio. The bank's exposure to the government's securities that will be restructured represents 53% of its investment portfolio as of year-end 2009, S&P said.
S&P said it expects to resolve the creditwatch once it assesses the effect of a restructuring program on NCB's liquidity and future performance.
To read the full report, go to this link (http://www.bnamericas.com/reports/133509.pdf)
By Business News Americas staff reporters
* BB says US$1bn bond issue abroad met strong investor demand - Brazil
Federally controlled Banco do Brasil (BB) saw investor demand for its recent US$1bn bond issue on international markets reach US$3.3bn, local news service Agência Estado reported BB capital markets and investment director José Maurício Pereira Coelho as saying.
On Friday (Jan 15) Brazil's largest bank sold US$500mn in five-year bonds with a 4.651% yield, or 220 basis points above US treasuries. The other US$500mn issue was 10-year bonds with a yield of 6.074% and 237.5 basis-points above the US Treasuries.
The funds will be used for trade finance and, for the first time in the bank's history, to finance working capital for Brazilian multinationals abroad.
"This reaffirms our follow-the-flag strategy, which is to follow Brazilian companies around the world. We're present abroad so we can support Brazilian companies and Brazilians," said Pereira Coelho.
By Business News Americas staff reporters
* Factorline aims to enter banking business, re-enter consumer finance - Chile
Chile's largest factoring company Factorline plans to enter the banking industry either through a purchase or by starting from scratch, as well as re-enter the consumer finance business which it sold in 2008 to local bank BCI, daily La Tercera quoted Factorline chairman Jorge Sabag as saying.
Factorline is aiming to broaden the array of financial services it offers by entering the insurance and stock brokerage businesses among others over the next few years, the executive said.
The company's entrance to the insurance segment will first be carried out through an insurance brokerage, and in two to three years when it has the necessary critical mass, Factorline plans to launch an insurance company, he said.
The company is also mulling an IPO for the next two or three years, said Sabag.
Factorline - controlled by the local Massú family - had US$329mn in assets as of September 30 and operates through 30 branches countrywide.
By Business News Americas staff reporters
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In-deph interview
* BancoSol takes top spot in microfinance clients, sticks to its roots
Kurt Koenigsfest
CEO
BancoSol
Bolivia
http://www.bnamericas.com/interviews/banking/Kurt_Koenigsfest_,BancoSol,/170504950
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Main companies covered in today's news
* Fitch México S.A. de C.V.
http://www.bnamericas.com/company-profile/en/Fitch_Mexico_S,A,_de_C,V,-Fitch_Mexico/170504950
* Banco Central do Brasil
http://www.bnamericas.com/company-profile/en/Banco_Central_do_Brasil-BCB/170504950
* National Comercial Bank Ja. Ltd.
http://www.bnamericas.com/company-profile/en/National_Comercial_Bank_Ja,_Ltd,-NCB_Jamaica/170504950
* Allianz SE
http://www.bnamericas.com/company-profile/en/Allianz_SE-Allianz/170504950
* Standard & Poor's, S.A. de C.V.
http://www.bnamericas.com/company-profile/en/Standard_*_Poor*s,_S,A,_de_C,V,-S*P_Mexico/170504950
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