Latin America and Caribbean
LATEST ARTICLES
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Having taken a hammering following Mexico’s election results and the Brazilian president's comments on fiscal consolidation, the prospects for the key Latin American currencies over the remainder of 2024 are unclear.
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Investing in Latin America’s payment fintechs is having a moment – but will the region’s central banks kill off their revenue model by adopting their own version of Brazil’s PIX?
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Falling inflation has sparked an early surge in credit demand, which offers the prospect of banking normalization – a potential boon given the negative real interest rates banks are earning on their government securities portfolios.
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New transition bond includes step-down, as new ‘green infrastructure’ bond issued.
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The bank's new CEO has posted his first market-beating quarterly results, but the firm's exposure to lower-income segments could limit longer-term upside.
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A report from Citi asks if Mexican banks must increase interest rates on their deposit base.
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Huge international debt capital market issuance in September and October is forecast as investors may seek to take any US Treasury benefit through wider spreads.
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CEO Leandro Miranda tells Euromoney that the firm will use recently granted CVM license and secured deal mandates to raise equity.
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The region’s tough economic history, coupled with its strength in soft and hard commodities, makes it best positioned to tackle today’s challenges.
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Mexican banks have sold off hard since Claudia Sheinbaum – as widely expected – was confirmed as the country’s next president.
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Though HSBC retrenched from other Latin American markets, it stayed in Mexico, and country chief Jorge Arce says that the bank is well-positioned to take advantage of the nation’s unique blend of structural growth drivers.
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The bank is looking to capitalise on its local presence in Latin America as Korean and Chinese firms intensify their nearshoring efforts.
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Unlike other firms in Latin America, BTG Pactual hides its growing retail digital banking business within its wealth-management division. Why?
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New accounts targeted at low-income customers reflects the reality of intense competition in the sector.
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The Brazilian neobank is growing its number of clients faster than perhaps any financial institution on earth. Combine this with static unit costs and the operational leverage potential is big. CFO Guilherme Lago explains how its business model is now focused on the next five to 10 years as open banking generates unprecedented price transparency, customer portability and opportunity.
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Does Banco Galicia’s acquisition of HSBC Argentina validate president Javier Milei or weaken him?
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XP has succeeded in Brazil by using its technological efficiencies to win on digital experience and price. But now the incumbents are catching up and XP chief executive Thiago Maffra is focusing on developing service beyond pure online delivery.
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President Javier Milei campaigned on cuts – and that is what he has delivered. But like all extreme diets, the approach is unsustainable. Time to rethink the plan.
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The paradox of Itaú is that it has maintained its leadership of Brazil’s banking sector with an ease and assuredness in recent years that belies the radical and continual transformation going on under the surface. The bank’s CFO, Alexsandro Broedel, tells Euromoney that its management’s only real constant is to view every new player as an existential threat – and react accordingly.
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Reports that the long-rumoured deal has been agreed suggest growing optimism among Argentine bankers about the new administration.
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The leading neobanks in Brazil seem to have hit their stride in terms of profitability just as some of the traditional banks have stumbled. Are these firms the future of Brazilian banking?
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The Brazilian government’s changes to the laws governing its tax-exempt debentures have allayed financial market fears that president Lula intends to rely on BNDES to fund billions spending on infrastructure, crowding out private-sector finance.
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Chief executive Carlos Eduardo Guimarães says that he expects the bank’s return on equity to double to between 20% and 22% in the next two years.
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Banco Inter reported return on equity of 8.5% in the fourth quarter of 2023 but is now targeting a return on equity of 30% by 2028, CFO Santiago Stel tells Euromoney.
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Domestic companies launch banking-as-a-service models as the country's central bank creates space for new entrants.
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A recent rule change means that Brazilian banks will be able to use tax credits related to provision expenses sooner – and the impact could be material.
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Internal and external reforms are under way as the new president signals a break with the previous administration.
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It is not hard to find short-term worries over global markets’ state of readiness for the US’s transition to one-day settlement in late May. But even if the UK, Europe and those Asian markets still using two-day settlement can adapt to the shift in the longer term, they will also face intense pressure to lessen their dislocation from the US cycle by copying its move. Many also fear the ultimate end-game of same-day or even instant settlement.
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Brazil’s banks have been talking a good game about capturing the outperformance of smaller, privately held companies in the country. Now a new banking advisory firm – packed with senior bankers – has made this segment its entire business strategy.
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New entrants spur breadth and depth in the country’s capital markets.
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A team of once-public sector bankers and officials is launching a new private equity fund that aims to identify ‘climate winners’ from the transition to a decarbonized economy. It has identified key industries but its central thesis is regulation.
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The cost to the government of supporting the Mexican oil firm’s debt could rise to 1.5% of GDP in 2025. Could it walk away?
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BR Partners grew steadily up until its successful IPO in 2021. However, tougher markets since that float have led to a period of relative consolidation. Will 2024 see a resumption of chief executive Ricardo Lacerda’s ambitious empire building?
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The appointment of Marcelo Noronha as chief executive of Bradesco should probably have taken place five years ago. Is he still the right man for the job?
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The bank must broaden its horizons if performance is to improve.
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The sovereign pushed hard on its first use-of-proceeds green bond, but a sustainability-linked bond was not seen as a practical option for now.
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Markets jump on the news that Javier Milei will be Argentina’s next president. A large devaluation is needed, but that leads to the risk of deposit flight.
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Sector shows strong profit performance in the third quarter as asset quality improves.
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As Citi presses on with its consumer-banking exits around the world, the job of defining what its international network now represents falls to its newly appointed head of international, Ernesto Torres Cantú.
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Private banking clients have begun exploring alternative asset allocation strategies in Brazil. Euromoney talks to the founders of a startup that is tapping into this demand with a strategy focused on special situations.
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High interest-rate regulations skew credit portfolio allocation and stifle new entrants to the sector, but the new president may have other challenges to solve first.
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Latin America has been a relative backwater for private equity firms. Could better equity market conditions in the region drive an uptick in activity?
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Record sustainable finance issuance will still only get you so far.
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Digital banks look to online games to help drive retention.
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It is rare that a popular, fast-growing and secure financial product is put at risk, but could the boom in FGTS loans in Brazil be under existential threat?
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If you owe the IMF $3.6 billion, it’s your problem. But if you owe the IMF $36 billion, it is their problem.
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Deutsche Bank’s Mexico team says the country is vital for Latin American credibility and that nearshoring will drive FDI in the coming decade.
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Latin American issuance was solid, if unspectacular in the first half of this year. However, with politics, sticker price resistance and refinancing needs skewed to 2024, the next half may be more difficult.
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Patricio Sepúlveda, head of Chile’s public debt office, discusses how programmatic issuance demonstrates commitment to sustainability-linked bond goals and can make these structures more cost effective.
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The frontrunner in the Argentine presidential election campaign has said he wants to abolish the peso and replace it with the US dollar. Is it blue-sky thinking or just greenback dreaming?
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Private bankers are eyeing PE and venture capital investments as digital platforms emerge in Brazil, but personal advisory remains critical.
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The Brazilian bank is focused on new initiatives aimed at boosting active-user rates, including a new global app and buy-now-pay-later product.
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Second-quarter results from Brazil’s largest banks, published over the first half of August, revealed a bounce in financial performance. But it may be premature to dismiss further asset-quality deterioration down the line.
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Trade and currency wars have boosted Brazil’s agribusiness sector in the past couple of years. Higher prices for soft commodities have, however, accelerated a trend that has been noticeable for many years: the country’s inward focus.
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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.
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The evolution of Brazil’s central bank payments programme could be good news for banks.
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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.
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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.
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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.
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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?
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The bank’s chief financial officer says Inter is moving into an expansion phase, following an ambitious and aspirational ‘north star’.
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The bank’s new head must withstand political pressure to extend subsidized credit and lower underwriting standards.
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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.
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Nearshoring has been seen to drive credit growth among the country’s smaller regional banks.
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The region’s advantage is likely to be short-lived and could fade by 2024, according to JPMorgan's private bank head.
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Local flows to fixed income and equity redemptions limit ECM liquidity.
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Restrictions on redundancies force out larger banks in Mexico from bidding for business.
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Uruguay reignites the debate on transition finance with its sovereign sustainability-linked bond.
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The bank is focusing on organic growth by acquiring retail clients and launching a private bank.
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Proactive risk tightening in 2021 sees surging return on equity as scale brings operational leverage.
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The market reaction to the third-quarter results from Brazil’s second-largest private bank has revealed investor sensitivity to banks’ deteriorating asset quality.
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Bank’s ESG head urges competitors and regulators to respond more quickly to emissions accounting challenge.
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While fintechs have been thriving in Brazil and throughout Latin America, the region’s local stock exchanges have failed to attract IPOs.
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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.
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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.
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The new administration is expected to be less receptive to bank privatization as the result boosts ‘Lula portfolio’ stocks.
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The market for remittances is expected to grow by almost 10% in 2022, driven by diaspora-linked savings.
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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.
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New deal adds two-year payment deferral to existing natural-disaster clause to mitigate impact of a future pandemic.
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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.
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Europe and the US remain the focus, but LatAm and Asia Pacific will also contribute to volatility in 2022.
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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.
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Banco do Brasil’s outstanding second quarter means that scrutiny will intensify at its domestic rival.
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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.
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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.
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Will higher rates today come at the price of more pain tomorrow?
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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.
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Despite some notable challenges, Latin American currencies could continue to surprise in the second half of the year.
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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.
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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.
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Asset quality is under threat across the region, but particularly in Peru.
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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’.
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The pressure for a short-term boost to ROE might force Bradesco to re-evaluate its insurance portfolio.
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Plans to incentivize foreign capital aim to boost capacity, with a new internal ‘investment bank’ to drive growing pipeline.
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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.
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A combination of geographical position and commodity strength is working in the country’s favour.
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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.
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The rule change will be phased in, but shares in publicly listed fintechs dip.
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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.
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Vaca muerta is an enormous oil and gas field, but it may be too late to exploit it.
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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?
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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.
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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.
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The rationale behind a bank buyback can be different in emerging versus developed markets.
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The chance to acquire Citi’s Mexican business could attract some unexpected bidders.
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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?
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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.
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The decision to sell Citibanamex ends the ‘Mexican exception’.
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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.
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German lender renews focus on LatAm after 2015 withdrawal.
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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.
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The CEO and CFO aren’t about to abandon the physical in the chase for digital business.
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At the end of each year, Euromoney takes a close look at the performance of 25 key institutions that we cover. Speaking to senior executives at these firms, we assess what went right and what didn’t, together with what might lie ahead. This year, we have also examined the views of those at the top on two important factors for 2022: their own and others’ asset quality, and the disruptive threat of China. Their observations are discussed in the two features below, followed by our reports for 2021 on the Euromoney 25.
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Rebooting the financial system with a new currency could be what’s needed to give Argentina’s economy a way forward.
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The recent appearance of a golden bull outside the São Paulo's B3 stock exchange was something of a red rag to the city’s populace.
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The Peronist playbook is back in force: Argentina’s monetization of fiscal deficits relies on the banking system buying central bank and government securities. This time around the movie has a new subplot: credit growth in both the corporate and retail sectors is increasingly taking place outside the traditional banking sector.
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The fiscal deterioration of Latin America’s former totem has more than just the pandemic behind it.
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Banco Pan’s turnaround has taken another step forward with its acquisition of ecommerce platform Mosaico. Chief executive Carlos Eduardo Guimarães talks to Euromoney about the importance of growth with profitability.
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Ricardo Lacerda launched a boutique investment bank in the aftermath of the 2008 financial crisis. Having finally succeeded in IPOing his firm at the third attempt, he now looks to navigate it through Brazil’s turbulent waters.
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Amazonia Impact Ventures says that financing sustainable agricultural production can reduce deforestation rates.
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The world has been pressuring Brazil about the deforestation of the Amazon rainforest within its borders for decades. New ESG-style initiatives are being adopted by Brazilian banks and businesses, but it could be the climate impact closer to home that’s creating the impetus for real change.
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Gustavo Montezano has been president of BNDES since July 2019. He is on a mission to get Brazil’s state development bank to adapt to the new financial reality of ESG. How the resultant tensions play out will be crucial to the development of Brazil and the world.
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Brazil’s central bank attempts to redress the country’s woeful environmental reputation with climate-related stress tests.
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Appetite for emerging market risk is much lower in the wake of Covid-19 than it was after the global financial crisis. This is the result of a mix of technical and fundamental factors, but it is primarily driven by the spectre of the emerging markets’ Achilles heel: inflation.
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Other Latin American countries watch with interest as El Salvador’s bitcoin experiment gets off to a faltering start.
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Chilean corporates can now sell through Euroclear, following the sovereign’s successful experience.
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The IFC’s Latin America head sees local capital markets growth as key to financing sustainability.
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This year was like no other in Latin American banking – and the huge leap forward in digital adoption throughout the region caused by the pandemic is here to stay.
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Bank CEOs do not like it, but the regulators are fostering competition.
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Private sector investment led to a Q1 GDP surge, with drought and energy shortages the main threat to economic revival.
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Payments company prices above range as it shrugs off regional valuation constraints on Nasdaq debut.
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Founder and former chief executive Guilherme Benchimol was keen to stress the mould-breaking attributes of his chosen successor as he passed the reins of XP Inc to Thiago Maffra in May.
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The Swiss bank’s move onshore comes as other foreign players are leaving.
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BBVA is relying more on its Latin America business. And the countries in that region are relying more and more on the global bank in turn. BBVA’s global head of country monitoring, Jorge Sáenz-Azcúnaga, explains how he expects this symbiosis to evolve.
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In recent years, Brazil has endured famine, flood and pestilence. What’s next?
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The cost advantages for some fintechs will become compromised as they begin to build physical operations. Euromoney speaks to Sergio Furio, CEO of Brazilian secured lender Creditas, about moving into the real world.
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State-owned Caixa Economica cashes out of its Pan investment with R$2 billion profit.
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Bankers sign up to open letter decrying the government’s handling of the crisis.
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Liquidity events rather than asset migration drive market share gains.
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The country’s president has responded to falling approval ratings and the threat of a trucker strike by raising bank taxes.
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The country’s banks have become accustomed to the disruption caused by the new challengers, but XP Bank could take this to a whole new level.
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Given its reputation, it’s not surprising that Argentina’s bonds are pricing in a high chance of default in coming years. It’s a little harder to understand why the country’s creditors are enabling this.
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Milton Maluhy officially became Itaú’s new CEO at the beginning of February. He now faces the challenge of cutting the bank down to size.
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The bank's management is confident that pandemic losses will be contained.
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Data provides quantification into central but opaque market trend; PayU plans to add credit services to clients’ customers at check-out.
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Emerging markets have regained some of the buoyancy lost during the early months of the coronavirus crisis, but analyst opinions hint at the difficulty of identifying which EM currencies investors should favour.
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Brazil should be well placed to benefit from renewed interest in forestry projects, but the country’s restrictive land laws could lead foreign investment to flow elsewhere.
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Brazil's Nubank is the world’s most valuable fintech in the digital banking space – now worth over $25 billion. In his first interview this year, chief executive and co-founder David Velez explains why he’s in no rush to IPO and why he would rather focus on the huge opportunity left in Brazil and elsewhere in the region.
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LatAm has seen a surge in ESG bond issuance this year, as banks and corporates play catch up in the sector.
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The position of CEO Andre Brandao – and his plan to rationalize the bank's cost base – are both surrounded in doubt.
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Daniel Darahem has returned from Asia to take the reins of JPMorgan’s Brazilian business. He predicts that the coming decade will witness transformation at a speed never seen before for both the bank and the country.
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The congressional debate on Mexico's controversial proposed currency bill has been postponed, but opponents, including the country's central bank, should not celebrate too soon.
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Adopting orthodox policies in a bid to secure IMF agreement is a positive for Argentina, but regulations still restrict the banks compounding big FX exposures.
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Brazil’s fintechs and digital challenger banks are making more ground than traditional firms with the central bank’s new payments system.
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Brazil’s richest man leaves behind privately held banking empire. Antagonism between sons could lead to a power struggle
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Itaú Unibanco continues to outperform its peers in Brazilian banking, but its traditional competitors aren’t the real problem.
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Is a slew of pulled deals really a sign of a healthy IPO market?
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Three presidents in a month isn’t enough to deter buyers of the country’s century bond.
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UBS’s strategy of creating emerging markets growth through partnerships is writ large in its joint venture with Banco do Brasil. Can the new entity become more than the sum of its parts?
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Brazil’s central bank launches a free instant-payments tool.
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dLocal payments platform 'exists to solve complexity'
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In a year of shocks and surprises, it’s hard to say where Mexico’s economic and financial performance ranks – but it’s up there.
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The Dominican Republic’s banks, which were supported by a swift series of measures when Covid-19 struck, are now being asked to fund the government until fiscal reform can be enacted.
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Banco Inter’s chief executive João Vitor Menin is a banking revolutionary. His vision of the bank’s future is a super app, supporting both e-commerce and financial services. He is refreshingly fearless about upsetting the established order.
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The BRICS economies, which between them represent 40% of the world population and 32% of its GDP, are a powerful force for the private banking industry as their economic engines drive wealth creation. But they are all distinct markets with their own unique opportunities and challenges.
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The former president of Brazil’s central bank spent six months cooling off before joining Credit Suisse.
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In stark contrast to previous periods of crisis, Brazil’s private-sector banks have been growing market share this year as the public banks have retrenched. This should translate to a busy deal pipeline as they look to refinance.
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Credit Suisse has hired several big guns in the battle for the banking market in Brazil. Chief among them is Ilan Goldfajn, ex president of the central bank of Brazil.
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Brazil’s largest fintech has 5% market share and now poses strategic challenge to market leaders.
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Chile’s new financial portability law came into effect in September, providing a huge shot in the arm to financial innovation in Latin America’s most stable banking market.
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Nubank’s acquisition of Easynvest this month is just one example of how the financial market in Brazil is developing at a dizzying speed.
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Brazilian bank set to take in US firm’s domestic bankers and clients.
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The penny is finally dropping – and bankers in Brazil appear to be taking deforestation in the Amazon seriously.