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Wednesday, January 20, 2010
Today's News Headlines
* Banks January-November profits jump 66% - Argentina
* Banco de Chile 2010 challenges range from efficiency to treasury returns - analyst - Chile
* Citi sees US$2.4bn profit in region in 2009, restarts investments - Mexico, Regional
* Roundup: 3 more interventions, 2 liquidations, 1 arrest - Venezuela
* Round up: Serasa Experian credit figures, Itaú Unibanco gets anti-trust approval, affirmed by S&P - Brazil
* M-banking gathering momentum - Regional
* BROU 2009 earnings plunge 79% - Uruguay
* Banco Consorcio carries out new US$41mn capital increase - Chile
* CariCRIS places financial institutions on rating watch developing - Jamaica
* BB takes over São Paulo payroll contract for US$409mn - Brazil
* IN BRIEF Pure Leasing sheds US$37.9mn in loans to improve financials - Mexico
* IN BRIEF Eton Park buys 66.5mn Financiera Independencia shares - Mexico
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* Banks January-November profits jump 66% - Argentina
Argentine banks posted combined earnings of 7.27bn pesos (US$1.91bn) in January-November last year, up 66% from the same period 2008, according to a report by the central bank.
Banks' net interest income was up 46.7% to 12.6bn pesos in January-November, while fee income rose 20.5% to 11.8bn pesos.
Provisions for loan losses jumped 47.7% to 3.47bn pesos, and administrative expenses climbed 20.4% to 20.4bn pesos.
The crisis generated by the Argentine government's attempt to fire the president of the central bank has taken its toll on the stocks of local banks, on fears that the crisis will batter their earnings as banks hold a high proportion of government bonds.
"Although the central bank standoff brings uncertainty to the market, once it's solved the price of Argentine assets will recover as they wait for the debt exchange with the holdouts," IR manager of Grupo Financiero Galicia (NasdaqCM: GGAL), Pablo Firvida, told BNamericas.
Banks' lending to the private sector expanded 6.3% to 141bn pesos in the 12 months through November 30, the central bank said. The non-performing loan ratio for those loans worsened to 3.6% as of end-November from 2.9% at the same time last year, but the figure fell 10 basis points from October.
Private sector deposits amounted to 192bn pesos at end-November, up 12.7% on 12 months prior, the central bank said.
Banks strengthened their combined equity by 16.3% to 47.6bn pesos in the year through November.
Total bank assets in Argentina hit 377bn pesos as of November 30.
By Jorge Porter
Business News Americas
* Banco de Chile 2010 challenges range from efficiency to treasury returns - analyst - Chile
Chile's second largest bank Banco de Chile (NYSE: BCH) faces several challenges in 2010, including improving the bank's efficiency ratio, growing among the more profitable loan segments as well as improving the treasury department's returns, which underperformed last year, Natalia Aránguiz, analyst at Santiago-based research firm WAC, told BNamericas.
The bank posted consolidated net income of 258bn pesos (US$524mn) in 2009, according to the company's latest earnings release.
Banco de Chile's net interest income amounted to 670bn pesos, and fee income reached 242bn pesos. Operating expenses totaled 496bn pesos, bringing the bank's operating profit in 2009 to 297bn pesos.
While results are not directly comparable to previous years as banks in Chile adopted new IFRS accounting standards in 2009, Aránguiz said the bank posted a 5.3% nominal drop in 2009 earnings compared to a 16% increase in the case of the whole financial system.
Part of the reasons behind the bank's poor performance in 2009 are a weaker net interest margin, which represents about two thirds of its operating revenues, poorer returns from the bank's trading desk as well as negative inflation.
However, Banco de Chile remains second best in terms of profitability indicators among its peer group and showed the lowest non-performing loan ratio as of end-November, Aránguiz said.
Lower provision expenses given a lower portfolio risk and better macroeconomic perspectives for the country in 2010 should help earnings growth this year, she said.
Banco de Chile had 17.5tn pesos in assets and 1.39tn pesos in equity as of end-December.
Citi (NYSE: C) owns a 10% stake in Banco de Chile.
By Jorge Porter
Business News Americas
* Citi sees US$2.4bn profit in region in 2009, restarts investments - Mexico, Regional
Citi (NYSE: C) reported US$2.44bn in profits from its Latin American operations in 2009, a turnaround on a US$1.71bn loss the year before, the bank said in a press release.
The Latin American consumer banking operations saw net income of US$323mn, compared to a loss of US$3.35bn in 2008, while Citi's regional securities and banking operation saw profits of US$1.51bn, up 44%, and regional transaction services had US$604mn in profits, up 3%.
Regional consumer banking revenues totaled US$7.35bn, down 16%, mainly due to a 25% drop in card revenues, with retail decreasing just 5%. The card business saw a loss in the year, while retail turned a profit after a significant loss the year before.
REGIONAL CONSUMER BANKING IN Q4
Citi had fourth quarter net income from regional consumer banking of US$55mn, up from US$29mn in Q3 and a turnaround on a US$4.22bn loss in the year-ago quarter. Revenues were US$1.92bn in Q4, up both sequentially and year-on-year, due to increasing deposits, loan balances and card purchase sales, as well as the impact of foreign exchange, according to the release.
Marketing and investment spending was increased in Latin America in the quarter due to continued signs of economic recovery.
"The repositioning of the Mexico card business is nearly complete, and we're now investing to grow this business," Citi's CFO John Gerspach said during a conference call on results.
In the fourth quarter, "We invested in card account acquisition with a focus on higher quality new accounts consistent with the repositioning of the portfolio," he said.
Regional credit costs dropped sequentially in the quarter for the biggest drop worldwide, thanks to lower credit losses in the Mexico card portfolio, reflecting the repositioning and improving economic conditions.
The card net credit loss rate in Latin America was 15.6% in the fourth quarter for the best result of the year, although still higher than 2008 levels. The 90-day past-due loan ratio decreased to 4.55% in the quarter, its lowest level since 3Q08.
Retail banking saw both the net credit loss rate and past-due loan ratio increase year-on-year and sequentially in the fourth quarter.
The regional consumer banking operations finished the year with 16.6mn accounts, down 5% from a year earlier, and 2,216 branches, up 4%.
GLOBAL RESULTS
Worldwide, Citigroup made a net loss of US$1.61bn in 2009, after losing US$27.7bn the year before. The results were broken down by the group's realigned segments: Citicorp and Citi Holdings.
Citicorp is the firm's core business, while Citi Holdings holds the firm's non-core businesses, which are being divested and include brokerage and retail asset management operations. Citicorp booked a US$14.8bn profit in the year, an improvement on US$6.17bn in net income in 2008, while Citi Holdings recorded a US$8.24bn loss, compared to a loss of US$36.0bn the year before.
By William Schatz
Business News Americas
* Roundup: 3 more interventions, 2 liquidations, 1 arrest - Venezuela
Venezuela's government on Monday (Jan 18) intervened in three additional financial institutions, banks InverUnión and Banco Del Sol and savings and loan entity Mi Casa.
The closed-door interventions of the companies is necessary due to management and administrative problems that have made them unable to meet their short-term obligations, banking regulator Sudeban said in a statement.
Deposit guarantee fund Fogade will cover 1,686 deposit holders at InverUnion, or 95.3% of the total, 1,498 depositors at Banco Del Sol, or 97.9% of the total, and 162,266 depositors at Mi Casa, or 98.5% of the total, according to the statement.
***
Also, Sudeban has ordered the liquidation of previously intervened-in Banco Real and investment bank Baninvest after auditor reports deemed their operations unviable, the regulator said in a separate statement.
The banks, taken over by the government on December 4, have a large discrepancy between liquid assets and liabilities and hold a large portion of CDs in other banks intervened in by the government, Sudeban said.
***
The country's public prosecutor has filed a lawsuit against Caribay Camacho de Castro for her actions involving banks Confederado, Bolívar and Banpro, which were intervened in on November 20.
Camacho de Castro is currently in custody, as are eight other people connected to the same banks, the prosecutor said on its website.
By Business News Americas staff reporters
* Round up: Serasa Experian credit figures, Itaú Unibanco gets anti-trust approval, affirmed by S&P - Brazil
Brazilian companies' demand for credit from both financial and non-financial institutions fell 4.4% last year compared to 2008, according to local credit information firm Serasa Experian.
The reduction is mainly due to the impact of the crisis in the first half of 2009, when companies' demand for credit dropped 6.7% on the year-ago period.
***
The level of consumer credit risk in the country improved in the last quarter of the year thanks to a reduction in consumer credit defaults during the second half of 2009, Serasa Experian said in a separate statement.
Serasa Experian's consumer credit risk indicator hit 78.6 in Q4 compared to 78.2 in the previous quarter. The scale is 0 to 100 and the higher the better.
***
Brazilian antitrust regulators Seae and SDE have recommended the approval, without any restrictions, of the merger between Itaú and Unibanco, domestic news service Agência Estado reported.
The two announced their merger in November 2008 to form Itaú Unibanco (NYSE: ITUB), Brazil's largest private sector bank. Itaú Unibanco is already operating, but has not yet obtained all approvals.
In reports to be submitted to the country's top antitrust watchdog, Cade, which has the final say on the matter, the regulators said the merger will not hurt competition in Brazil's banking sector.
***
Standard and Poor's said it affirmed the ratings, including the BBB/A-3 global scale corporate credit ratings, on Itaú Unibanco and its core subsidiaries Banco Itaú BBA and Unibanco.
The ratings have a stable outlook and take into account "a strong and diversified business position as the largest private bank in Brazil and in Latin America, successful track record in terms of profitability and efficiency, and large and stable deposit base backing strong liquidity," said S&P credit analyst Marcelo Peixoto. "The bank has also shown sound capitalization."
S&P said the credit profile is limited by the industry risks in its main market (Brazil), the challenges of conducting a complex integration in competitive markets and exposure to a riskier credit portfolio than its peers.
By Business News Americas staff reporters
* M-banking gathering momentum - Regional
Mobile banking is starting to pick up steam in Latin America with several announcements made over the last week.
On Tuesday (Jan 19), banks in Suriname and Mexico launched new services. Last week, Chilean mobile operator Entel PCS launched a system with the country's second largest bank Banco de Chile.
SURINAME
Suriname's largest bank De Surinaamsche Bank has become the country's first financial institution to deploy an m-banking solution, using technology from MoadBus and Vasco Data Security, according to a statement.
MoadBus is a provider of financial software and services and Vasco provides authentication and e-signature solutions.
The m-banking solution allows bill payment and two-way actionable alerting features. It is supported by an authentication and security mechanism integrated with Vasco's digipass transaction signature.
"Banks have recognized the strength of the mobile platform to offer additional services. Thanks to [the solution dubbed] MBanking, banks can substantially increase their financial services outreach by using a multi-channel approach," Vasco's president and COO Jan Valcke said.
MEXICO
In Mexico, bank BBVA Bancomer launched an m-banking service called Bancomer Móvil, the bank said in a statement.
BBVA Bancomer already has more than 1mn users of its online self service system, which sees 140mn transactions annually and a network of 6,100 ATMs.
In the statement, BBVA Bancomer said it expects to have 80,000 customers for m-banking in the first three months of service and end the year with 500,000.
Besides the typical functionalities such as checking bank balance and transfers, users will be able to pay off their credit cards and make purchases in retail outlets associated with m-banking system Nipper.
Nipper was launched in 2008 by mobile operators Movistar and Iusacell in conjunction with the electronic payments infrastructure fund Fimpe. It is intended to be used for small payments of up to 1,000 pesos (US$79) with payment agreements set up with cinemas, bars and clothes stores.
Fimpe was started in 2005 by a group of banks in a bid to buy and install new credit-debit card terminals to encourage e-payments.
"BBVA Bancomer anticipated the potential for using cell phones for banking five years ago by offering our clients the first system in Mexico of SMS alerts, Alertas Bancomer," the company said.
By Business News Americas staff reporters
* BROU 2009 earnings plunge 79% - Uruguay
Uruguay's largest bank, state-owned Banco República (BROU), booked a 786mn-peso (US$58.8mn) profit last year, down 79% compared to 2008, according to central bank figures.
BROU's net interest income was down 18% to 8.66bn pesos, with operating profits falling 41% to 2.77bn pesos on higher administrative charges.
Fee income was up 10.4% to 921mn pesos, and the bank registered a 78.4mn-peso provision reversal last year compared to a 1.64bn-peso charge in 2008.
Net loans at end-December totaled 133bn pesos, increasing 18.8% on the same time 2008, with the past-due loan ratio worsening to 1.32% from 1.19%.
BROU holds around 45% of the financial system's deposits and 30% of gross loans.
By Business News Americas staff reporters
* Banco Consorcio carries out new US$41mn capital increase - Chile
Chile's Banco Consorcio has completed a new capital increase to the tune of 20.1bn pesos (US$41mn) and has made official its brand name, the entity said in a press release.
The bank's parent company, Chilean financial services holding Consorcio Financiero, reached an agreement in October last year to buy local bank Banco Monex.
The new capital increase adds up to that which Banco Consorcio carried out in December for 6.43bn pesos, in which Consorcio Financiero paid 3,830 shares.
The latest capital increase was made by issuing 12,000 shares at 80 UFs each (the UF is Chile's inflation-lined unit), which were paid by Consorcio Financiero on January 15.
The two capital increases amount to a total of US$75mn, which will allow Banco Consorcio to adequately face the expected growth in loans and investments planned for 2010, the bank said.
By Business News Americas staff reporters
* CariCRIS places financial institutions on rating watch developing - Jamaica
Caribbean ratings agency CariCRIS has placed all its rated financial institutions in Jamaica on rating watch developing, following the announcement by the country's government of a domestic debt exchange, the agency said in a statement.
The institutions on rating watch are National Commercial Bank Jamaica (NCBJ), NCB Capital Markets, Sagicor Life Jamaica and Pan Caribbean Financial Services. The latter two are the Jamaican life insurance subsidiary and financial services unit, respectively, of Barbados-based Sagicor.
The exchange offer is likely to have varying degrees of impact on the profitability, capitalization, asset quality and asset values of these institutions, and their ratings are linked to the rating of Jamaica's government, CariCRIS said.
By Business News Americas staff reporters
* BB takes over São Paulo payroll contract for US$409mn - Brazil
Federally controlled Banco do Brasil (BB) will handle the payroll of the country's largest city São Paulo for the next five years, daily Estado de S.Paulo reported.
BB paid 726mn reais (US$409mn) for the contract that includes payroll payments for 220,000 municipal workers and also payment to suppliers.
BB's private sector rivals Itaú - now Itaú Unibanco (NYSE: ITUB) - and Bradesco (NYSE: BBD) had controlled the São Paulo payroll since 2005 when they won their contracts in a tender. Those contracts would have expired in September this year and the state will pay them 120mn reais in fines for terminating the contracts ahead of time.
The daily reported São Paulo mayor Gilberto Kassab as saying the city would greatly benefit from the 606mn reais it will receive after paying the fines as all of those funds would be invested in expanding the subway system.
By Business News Americas staff reporters
* IN BRIEF Pure Leasing sheds US$37.9mn in loans to improve financials - Mexico
Mexican leasing and specialized lending company Pure Leasing has sold 480mn pesos (US$37.9mn) of its loan book to Grupo Financiero Inbursa to improve its financial profile, the former said in a filing with the Mexico City exchange.
Pure Leasing lent 502mn pesos in 2008 for the construction of the so-called Templo Mayor de Chivas soccer field. The company began to sell portions of this loan to Inbursa in mid-2009, and Inbursa's total investment increased to 480mn pesos in December.
Through the deal, after which Pure Leasing retained just 22mn pesos of the loan, the lender reduced the concentration of its portfolio and received funds to help decrease its leverage and finance growth in the next few months, according to the filing.
By Business News Americas staff reporters
* IN BRIEF Eton Park buys 66.5mn Financiera Independencia shares - Mexico
US hedge fund Eton Park Capital Management and affiliated entities have purchased 66.5mn shares in Mexican multiple purpose finance company (Sofom) Financiera Independencia, the latter said in a filing with the exchange.
The purchase was part of a previously announced capital increase by Financiera Independencia (Findep) of up to 850mn pesos (US$67.0mn) through the issue of 85mn shares at 10 pesos each.
Eton Park had committed to purchasing up to 70mn shares, and will also have the right to purchase an additional 45mn shares - 25mn at 14 pesos per share and 20mn at 13.50 pesos - in Findep within the next five years, according to a previous filing.
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,/170693508
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Main companies covered in today's news
* Banco Central do Brasil
http://www.bnamericas.com/company-profile/en/Banco_Central_do_Brasil-BCB/170693508
* Banco de Chile S.A.
http://www.bnamericas.com/company-profile/en/Banco_de_Chile_S,A,-Banco_de_Chile/170693508
* Allianz SE
http://www.bnamericas.com/company-profile/en/Allianz_SE-Allianz/170693508
* National Comercial Bank Ja. Ltd.
http://www.bnamericas.com/company-profile/en/National_Comercial_Bank_Ja,_Ltd,-NCB_Jamaica/170693508
* Caribbean Information & Credit Rating Services Limited
http://www.bnamericas.com/company-profile/en/Caribbean_Information_*_Credit_Rating_Services_Limited-CariCris/170693508
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