The United Nations Economic Commission for Latin America & The Caribbean (ECLAC), followed by the International Monetary Fund (IMF), revised down economic expectations for the region in their respective Spring forecast updates, released in April. ECLAC went first on 7 April, forecasting an overall annual contraction of 0.6% this year for the region, following on from its estimated contraction of 0.5% last year. The commission said its new, weaker forecast was evidence of “the difficult global scenario, in which low growth continues in developed countries, there is a significant deceleration in emerging economies (China in particular), increasing volatility and costs…
Corpbanca and Itaú Fuse: On 1 April, the Chile-based Corpbanca and the local subsidiary of Brazil’s Itaú Unibanco formalised their long-drawn-out merger process. The merged entity, the fourth largest bank in the Chilean market, will be known formally as Itaú Corpbanca. It will trade under the Itaú brand, and will have US$41bn in assets and a US$31bn loan book. The Brazilian parent, Itaú UInibanco will control the bank, with a 33.58% shareholding. CorpGroup, former owner of Corpbanca, will have 33.13% of the shares, with the remaining 33.29% in the hands of a range of minority shareholders. The merged Chilean bank…
As of early 2016, Mexico’s commercial banking sector has many strengths. By many metrics, financial inclusion has improved over the last four years or so. However, it has much further to go match the standards of other countries in the Latin America & Caribbean region, let alone those of other upper middle-income countries. Lack of financial inclusion remains a major challenge for policy-makers. At first glance, it is easy to identify the strengths of Mexico’s commercial banks. According to the regulator, Comisión Nacional Bancaria y de Valores (CNBV), the total assets of the 46 banks in the country amounted to…
Mexico held its first-ever long-term power supply auction on 29 March, with mainly wind and solar companies competing for 15-year contracts to supply the state-owned Comisión Federal de Electricidad (CFE) with electricity. Despite an embarrassing glitch, the auction was widely hailed as a success, attracting total investment of over US$2bn, and positioning the country as a regional leader in renewable energy use. Two points are important to put the auction in context. First, it took place under the framework of the government’s wide-ranging energy reforms, introduced in 2015, which saw the CFE and state-owned oil company Pemex lose their monopolies.…
Odebrecht, Brazil’s large construction and civil engineering group, continues to be shaken by its implication in the major Lava Jato (‘car wash’) federal investigation into corruption at key state companies and other large firms in Brazil. In March, the former company CEO, Marcelo Odebrecht, who has been under arrest since June 2015, was sentenced to 19 years and four months’ imprisonment for his involvement in paying bribes (he continues to deny any wrongdoing and is appealing the sentence). That same month, his successor, Newton de Souza, confirmed plans to sell BRL12bn (US$3.3bn) worth of assets as the company seeks to…