Citigroup could be soon finalizing the sale of its consumer banking operations in Central America with Bank of Spain, which could be paying $1.5 billion.
A report on Bloomberg.com noted that negotiations between the US bank and the Spanish bank are very advanced, and only the only thing left is to define the final value of the transaction, which could amount to $1.5 billion, according to unnamed sources cited by Bloomberg.
Aside from the Colombian Grupo Aval, the Spanish company Banco Popular may also be in negotiations to acquire Citi's entire consumer banking operation in Central America.
The sixth largest bank in Spain, which at the moment has no presence in Central America, could be interested in acquiring the consumer banking operation that Citi has put up for sale in Costa Rica, El Salvador, Guatemala, Nicaragua and Panama.
An extension has been given to the deadline to make payments without affecting credit ratings and there are more flexible requirements for loans up to $350,000, both part of the changes approved by the Central Bank.
In order to produce citizens capable of making good financial decisions the first step should be to teach them mathematics.
EDITORIAL
Charlie Wells's article in The Wall Street Journal highlights results from a study which relativizes the importance of early learning finance when it comes to citizen's ability to address the management of their mortgages, household budgets or companies. Apparently, the most successful in these areas are people who received lessons on finance as children, compared to those who did not.
The Central American Bank for Economic Integration has approved a loan for technical and physical renovation of the Water Treatment Plant in Las Pavas, in the department of Cuscatlan.
From a statement issued by the Central American Bank for Economic Integration (BCIE):
The Central American Bank for Economic Integration (BCIE) has approved a loan the to Republic of El Salvador in the amount of $64.4 million to finance the renovation project on Works for the Collection, Purification and Treatment of the Electromechanical Water Plant Las Pavas, the most important source of drinking water El Salvador.
A request has been made that the interest rate paid by the government for using funds from the Pension Trust Bond rise from 1.3% to 7.5%.
Elsalvador.com reports that "... The leaders of the Committee requested yesterday that a new article specifically state that pension funds earn the passive base interest rate used for investments of 180 days and published by the Central Bank plus 3.5% .. . which ... it considers fair in relation to the payment made by the government to other international investors to lend them money. "
Slow growth is projected in El Salvador, very good performance in Nicaragua, stability in Panama, more competition in Guatemala and moderate growth in Costa Rica.
From a report by Fitch Ratings entitled "2015 Perspectives: Central American Banks":
Costa Rica:
Fitch Ratings has revised the outlook for the sector from positive to stable, because the agency does not anticipate substantial improvements in respect to the previous year. The system's profitability will remain low, with less than 1.0% ROAA. The results are limited because of the high dependence on net interest margin (NIM) and additional expenses in provisions for loan losses, due to regulatory changes that established gradual constitutions of general provisions for the best qualified loans. In addition, Fitch does not anticipate improvements in revenue diversification and also foresees a significant revenue exchange rate differential. This last factor has a significant influence on the results of the banks in Costa Rica.
Dicom, a division of Equifax, has received authorization to resume operations in the country, after having been suspended for alleged breaches several weeks ago.
From a statement issued by the Superintendent of the Financial System (SSF):
On November 18 the company Equifax Centroamérica, S.A. de C.V submitted a new application for authorization as a information agency for data relating to credit histories of individuals.
The banks Davivienda and Grupo Aval, already present in Central America, could be in talks with Citi to acquire its consumer banking operations in the region.
The sale of assets of Citigroup in 7 countries in Latin America represents an expansion opportunity for Colombian banks.
After closing the operation of the information provider, Dicom, a division of Equifax, the financial authorities have authorized the operation of the companies TransUnion El Salvador and Procrédito .
From a statement issued by the Superintendency of the Financial System of El Salvador (SSF):
The Board of the Financial System of El Salvador has approved a request by the company TransUnion El Salvador SA de CV and Asociación Protectora de Créditos de El Salvador, Procrédito, so they can operate as agents of credit history information services.
The microcredit portfolio in Latin America and the Caribbean is worth over $40 billion, is awarded by more than 1,000 institutions, and reaches more than 22 million customers.
From a statement issued by the Inter-American Development Bank (IDB):
A new report documents significant expansion of microcredit in Latin America and the Caribbean
GUAYAQUIL, Ecuador - Microcredit in Latin America and the Caribbean remains strong and continues its expansion of the last decade, experiencing an increase in their number of customers, a variety of institutions and a downward trend in interest rates according to new data released here today by the Multilateral Investment Fund (MIF), a member of the IDB Group.
The government negotiates with Mexico to obtain $128 million from the Yucatán Initiative to expand to four lanes the road going to the port of La Libertad and to build two bridges on the borders of La Hachadura and Aguiatú.
Of the $128 million earmarked for these projects, half is from a grant from the Government of Mexico and the rest from a loan that the country will obtain from the Central American Bank for Economic Integration.
Analysis by Fitch Ratings projects that banks in the region will maintain strong balance sheets and have stable profitability in 2014.
Excerpted from Fitch Ratings:
Differential Growth and Opportunities: Low financial depth, in most systems, continues to provide significant opportunities for expansion of bank balance sheets; although this is limited by low average income levels. In 2014, assets in the region could increase about 10%, mainly driven by higher portfolios. Central American banking portfolio growth will reach double digits, except for the systems in El Salvador and Panama, which will grow at a slower pace.
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