Latin America and Caribbean

The country’s economy was already weak before a serious drought hit. Now it is broke, and the question in Buenos Aires isn’t whether finance minister Sergio Massa can muddle through to the presidential election at the end of October, it is whether he can make it to the primaries in August before a full-blown financial crisis.

The evolution of Brazil’s central bank payments programme could be good news for banks.

UBS’s acquisition of Credit Suisse will further reduce the number of large international private banks in Brazil. Julius Baer has been quick to take advantage of this.

The country’s banking system seems as solid as ever, but its banks are seeing an uptick in delinquencies that could spin out of control.

The echoes of 2014 have been loud in Brazil’s private banking industry over the past 12 months. A precipitous fall in interest rates – followed by a meteoric rise – has left the market completely the same but also very different.

When the news broke that Argentina was thinking of merging its currency with that of its neighbour, Brazil, my immediate question was: which Argentine peso?

The bank’s chief financial officer says Inter is moving into an expansion phase, following an ambitious and aspirational ‘north star’.

Will 2023 be Brazil’s year – or Mexico’s?

The bank’s new head must withstand political pressure to extend subsidized credit and lower underwriting standards.

A persuasive case can be made for nearshoring, but so far in Latin America there has been little direct evidence that it is happening. In Mexico, things are about to change.

Nearshoring has been seen to drive credit growth among the country’s smaller regional banks.

The region’s advantage is likely to be short-lived and could fade by 2024, according to JPMorgan's private bank head.

Local flows to fixed income and equity redemptions limit ECM liquidity.

Restrictions on redundancies force out larger banks in Mexico from bidding for business.

Uruguay reignites the debate on transition finance with its sovereign sustainability-linked bond.

The bank is focusing on organic growth by acquiring retail clients and launching a private bank.

Proactive risk tightening in 2021 sees surging return on equity as scale brings operational leverage.

The market reaction to the third-quarter results from Brazil’s second-largest private bank has revealed investor sensitivity to banks’ deteriorating asset quality.

Bank’s ESG head urges competitors and regulators to respond more quickly to emissions accounting challenge.

While fintechs have been thriving in Brazil and throughout Latin America, the region’s local stock exchanges have failed to attract IPOs.

Brazil’s agribusiness sector is booming on the back of sky-high commodity prices. The public banks that have long financed the sector now face a wave of new private-sector competitors.

The Brazilian world of digital banks has it all: billionaire unicorns, sub-brands created by the incumbents and completely new disruptors. But one player has been quietly growing under the radar to become the country’s second-largest digital player.

The new administration is expected to be less receptive to bank privatization as the result boosts ‘Lula portfolio’ stocks.

The market for remittances is expected to grow by almost 10% in 2022, driven by diaspora-linked savings.

If Lula wins in Brazil, he is unlikely to focus on the strength of the private-sector banks because fintechs are doing that for him already.

New deal adds two-year payment deferral to existing natural-disaster clause to mitigate impact of a future pandemic.

While the impact on energy is centre stage, the war in Ukraine is also wreaking havoc on soft commodity prices and trade routes. Trade in agricultural commodities is taking a hit. The pool of banks financing these commodities is already dwindling, while the risks for those that remain are growing.

Europe and the US remain the focus, but LatAm and Asia Pacific will also contribute to volatility in 2022.

In its latest funding round, Brazilian-based Creditas proved that valuations for the stronger fintechs can buck the falling trend seen among the large, publicly listed startups.

Banco do Brasil’s outstanding second quarter means that scrutiny will intensify at its domestic rival.

Argentina faces yet another financial crisis and has brought in a new ‘super-minister’ to try to calm the market and placate the IMF. While he will find a sympathetic ear at the fund, not many other international investors are listening anymore.

The US bank has reorganized its Latam wealth management business to focus on faster growing countries, but home bias remains a tough instinct to overcome.

Will higher rates today come at the price of more pain tomorrow?

Campaigning for October’s presidential election has yet to officially start in Brazil, but it is expected to be bitter – and the risks of political fall out for Brazilian banks have already become all too clear.

Despite some notable challenges, Latin American currencies could continue to surprise in the second half of the year.

Latin America’s corporates are embracing sustainable local debt financing with enthusiasm. The region’s bankers are betting that it’s going to be as good for bookrunner fees as it promises to be for the environment.

Eric Cardozo, co-founding partner, COO and CFO of Brazilian private banking boutique WHG, talks to Euromoney about quitting a mainstream firm in 2020 and why more private bankers in the country seem to be following suit.

Asset quality is under threat across the region, but particularly in Peru.

Demographics and technology are creating new markets for financial services in population segments long ignored by traditional banks. The region is seeing a feeding frenzy in fintech startups – and the banks are responding with a new strategy: get ready to meet ‘co-opetition’.

The pressure for a short-term boost to ROE might force Bradesco to re-evaluate its insurance portfolio.

Plans to incentivize foreign capital aim to boost capacity, with a new internal ‘investment bank’ to drive growing pipeline.

This year, many Latin American debt issuers eschewed the traditional practice of issuing in January, believing the expensive market would move in their favour. That reading now looks like a bad one.

A combination of geographical position and commodity strength is working in the country’s favour.

The war in Ukraine has further highlighted the benefits of Banco Santander’s diversification across Europe and the Americas, according to executive chairman Ana Botín. However, its European home market may be a big disadvantage in Citi’s looming auction of Mexican lender Banamex.

The rule change will be phased in, but shares in publicly listed fintechs dip.

Brazil’s banks stand firm against fintech’s rise.

After the 2020 sale of its US bank, BBVA’s global ambitions in retail are alive and well. It has entered Brazil with digital bank Neon, ploughed more capital into UK app-based lender Atom Bank and launched in Italy in a way that presages branchless growth across the eurozone.

Vaca muerta is an enormous oil and gas field, but it may be too late to exploit it.

The first sovereign sustainability-linked bond has been announced, and it is no surprise that it is coming from Latin America. Investors and bankers will follow Chile’s transaction carefully, but is the issuer’s decision to enter war-spooked markets a sign of confidence or recklessness?

Beny Podlubny, head of XP Private, talks to Euromoney about the metaverse, risk appetite, international expansion and why Brazilian clients like to keep things close to home.

Itaú’s Argentinian firm is its smallest. Nevertheless, innovation in its retail segment could be a game-changer in the country – and potentially the region.

Calling time on the virtual meeting room

The rationale behind a bank buyback can be different in emerging versus developed markets.

The chance to acquire Citi’s Mexican business could attract some unexpected bidders.

Citi’s decision to withdraw from consumer banking in Mexico demonstrates the extent to which fintech players have transformed this market. How prepared are the other incumbents to take on the competition?

Having closed its onshore private wealth businesses in Brazil and Mexico, the US firm had a standout year in its Latin American private bank in 2021.

The decision to sell Citibanamex ends the ‘Mexican exception’.

It took all of six days of the new year before the tone was set: XP Inc’s announcement of its acquisition of Banco Modal. The deal will need regulatory approval, but is being warmly endorsed by the target’s management and its minority shareholder, Credit Suisse.

German lender renews focus on LatAm after 2015 withdrawal.

The momentum behind the loss-making bank’s IPO had become unstoppable by year-end, even as the range was eventually cut. It now faces intense scrutiny as a public firm.