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☆ How Ana Botín can defeat the Santander sceptics
▼ + stars: | 2022-12-21 | by ( Liam Proud | ) www.reuters.com time to read: +4 min

LONDON, Dec 21 (Reuters Breakingviews) - Investors aren’t buying what Ana Botín is selling. That’s striking because analysts expect Santander to earn a respectable 11% return on tangible equity (ROTE) over the next 12 months. One way to express the dissonance between those numbers is to infer the return investors require to hold the bank’s shares. To shed that discount, Botín must prove Santander is the best owner of its component bits. The group generated an annualised return on tangible equity of almost 14% in the first nine months of 2022.

☆ Analysis: Mexican companies could resort to more spinoffs to enhance market value
▼ + stars: | 2022-11-22 | by ( Valentine Hilaire | ) www.reuters.com time to read: +4 min

Mexican telecommunications giant America Movil (AMXL.MX) kicked off the trend late last year when its shareholders approved the spinoff of its cell tower business. Some analysts said both Alfa and Televisa may consider further spinoffs as they look to boost their depressed valuations. Other companies, like Coke bottler and retailer Femsa (FEMSAUBD.MX), whose shares are down 3.3% year-to-date, after gaining 6% in 2021, may follow suit. Alfa lost 2.69% the day after its shareholders approved the Axtel spinoff, while Televisa's shares advanced 0.86% the day after it revealed plans for a similar move. Televisa, meanwhile, could follow its sports spinoff with either its editorial or magazine businesses, two analysts said.

☆ Bigger loans help Brazil bank Itau's earnings outclass peers
▼ + stars: | 2022-11-11 | by ( ) www.reuters.com time to read: +2 min

Latin America's largest bank reported a third-quarter recurring net income of 8.08 billion reais ($1.51 billion), landing just below the 8.11 billion reais estimate of analysts polled by Refinitiv. Itau hiked its provisions for bad loans by nearly 50% to 8.27 billion reais, though unlike its peers, it did not raise its 2022 forecast for loan-loss provisions. The size of its loan book surged 15.5% year-on-year to reach 1.11 trillion reais, fueled by more personal loans. The company also reported higher income from interest it earned on customer debt. Its customer net interest income (NII) jumped 33% from a year earlier to reach 23.38 billion reais.

Investors have called for Lula to restore firm rules for public spending after major outlays by outgoing President Jair Bolsonaro through the pandemic and election campaign. Instead, Lula is pushing to dismantle old budget rules to ramp up social spending. Senator Simone Tebet, of the centrist Brazilian Democratic Movement party (MDB), said the economy minister should be his first cabinet pick to make clear what his policies are going to be affecting the economy. "An economy minister is needed to explain the president's political thought," she told reporters. The rout made clear that many investors want to see more clarity over ministerial appointments and how Lula aims to stabilize Brazil's public finances.

☆ Brazilian lender Itau's higher profits slightly miss forecasts on bad loan provisions
▼ + stars: | 2022-11-10 | by ( ) www.reuters.com time to read: +1 min

SAO PAULO, Nov 10 (Reuters) - Brazilian lender Itau Unibanco SA (ITUB4.SA) on Thursday posted a 19% jump in recurring net profit, which nevertheless landed slightly below expectations as it raised provisions for bad loans amid soaring interest rates. Latin America's largest bank reported a third-quarter recurring net income of 8.08 billion reais ($1.51 billion). Analysts polled by Refinitiv had expected profit of 8.11 billion reais. Net interest income (NII) from its customers jumped 33% from a year earlier to reach 23.38 billion reais. Itau reported a 90-day default ratio of 2.8% at the end of September, rising above the previous quarter's 2.7% albeit at a much slower pace than its peers.

☆ Rate cuts from June would be compatible with Brazil cenbank's target, official says
▼ + stars: | 2022-11-10 | by ( ) www.reuters.com time to read: +2 min

BRASILIA, Nov 10 (Reuters) - Brazil's central bank believes rate cuts from June 2023 would be compatible with bringing inflation in line with its target in 2024 based on market forecasts, the bank's director of international affairs, Fernanda Guardado, said on Thursday. "I want to reinforce that it is not our focus now (to discuss the) timing of rate cuts. According to the director, the central bank calculates that inflation in 12 months will be around the 3% official target in the second quarter of 2024, ending that year around this level. In October, the central bank held interest rates at a 13.75% cycle-high for the second straight policy decision. Policymakers paused the tightening cycle in September after 12 hikes lifted rates from a 2% record low in March 2021.

☆ Mark Zuckerberg is betting it all on the metaverse because he wants to create an imitation world where he controls everything
▼ + stars: | 2022-10-28 | by ( Travis Clark | ) www.businessinsider.com time to read: +4 min

Mark Zuckerberg is doubling down on the metaverse, despite Wall Street's concerns. In the metaverse, Zuckerberg's company Meta would own the data it collects. In other words, how you act in the metaverse, how you buy things in the metaverse, and even the metaverse itself. Since rebranding Facebook to the meta-focused Meta, Zuckerberg's own net worth has cratered by more than $81 billion, down 68%. Meta, and Zuckerberg, wants to dominate in everything, and it could in its own virtual reality.

A farmer spreads nitrogen fertilizer in his wheat field in Blecourt, France, May 27, 2021. Russia, under financial sanctions, is a major producer of fertilizer and natural gas, key in making nitrogen products to boost yields of corn and other crops. Since Russia's February invasion of Ukraine, Europe started weaning itself off Russian natural gas and a pipeline transporting ammonia from Russia to a Ukraine port shut down. European countries typically buy most of their imported urea, a form of nitrogen fertilizer, from North Africa, but are now purchasing it further afield, Wallace said. EU nitrogen prices eased in mid-October as some European plants resumed production due to softening natural gas prices, he said.

☆ JPMorgan-backed digital bank C6 to open Brazil branch network
▼ + stars: | 2022-10-19 | by ( Aluisio Alves | ) www.reuters.com time to read: +2 min

SÃO PAULO, Oct 19 (Reuters) - Brazilian lender C6 Bank is set to open its first five brick-and-mortar branches in the country in the next few weeks, an executive has revealed, enhancing the competition between the JPMorgan-backed digital bank and large retail lenders for high income clients in Latin America's largest economy. Similar units in Brazilian large cap lenders include Banco Bradesco SA's Prime (BBDC4.SA) and Banco Santander Brasil SA's Van Gogh . With the physical branches initiative, C6 aims to increase its share in the high income market, which it expects to cover some 5 million people in the country. In 2021, the purchase of a 40% stake in C6 marked JPMorgan Chase & Co's (JPM.N) debut in Brazil's retail banking. C6 was founded by former partners at Banco BTG Pactual SA , Latin America's largest independent investment bank.

☆ Analysis: Lula, Bolsonaro and market look to cure Brazil consumer debt hangover
▼ + stars: | 2022-10-17 | by ( Tatiana Bautzer | ) www.reuters.com time to read: +7 min

With nearly 70 million Brazilians blacklisted by credit agency Serasa, owing 290 billion reais ($54.4 billion), debt relief is smart politics in a closely fought presidential campaign, ahead of an Oct. 30 runoff vote. Advisers say he would focus first on 95 billion reais of unpaid bills accumulated by families earning up to 3,600 reais ($676) per month. Later steps would focus on incentives to restructure bank debt, for this population. Looking to steal his thunder, right-wing incumbent Jair Bolsonaro announced a program offering a sharp discount on bank debts. But the scope is far more modest, applying to some 4 million borrowers from state bank Caixa Economica Federal, which estimated about 1 billion reais of restructuring.

Capital outflows from emerging markets ex-China which only ended in August were akin to those during the 2013 taper tantrum, the IIF said in September. "Emerging market fortunes continue to rest quite heavily on what the Fed does," said Manik Narain, head of emerging markets strategy at UBS. Major emerging market central banks had delivered nearly 6,000 basis points in rate increases in 2022 until end-August in their inflation fight, Reuters calculations show. Developing central banks find themselves in different stages of the tightening cycle, said Claudia Calich, head of emerging market debt at M&G Investments. However, there is little let-up on the cards for smaller, riskier emerging markets.

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