Brazil

Brazilian state-led power company Eletrobras said on Tuesday that it plans to take over Cia de Eletricidade do Amapa (CEA) to help restructure the bankrupt northern Brazilian utility and recover debts, Reuters reported. The companies and the government of Amapa, which controls CEA, agreed to sign shareholder and management agreements aimed at restoring CEA to financial health, Rio de Janeiro-based Eletrobras said in a statement on Tuesday. Amapa authorities will receive financing from Brazil's federal government to pay off CEA's debts to Eletrobras and other suppliers.

Police in Sao Paulo said on Monday they had arrested the former head of bankrupt Brazilian lender Banco Cruzeiro do Sul on charges of money laundering and crimes against the country's financial system and capital markets, Reuters reported. Last month Brazil's central bank ordered the liquidation of the bank and its subsidiary, Banco Prosper, after seizing the lender on June 4 due to fraud-related losses and after administrators failed to find firm takeover bids. The liquidation of the bank represents one of the biggest collapses in the country's banking system in years.

Brazil's central bank seized Banco BVA SA on Friday, the latest sign of strain facing the nation's small-sized lenders following years of fast credit-fueled growth, Reuters reported. Deteriorating financing conditions and a breach of regulations at the Rio de Janeiro-based lender were cited as the main reasons behind the decision, the central bank said in a statement. Banco BVA had in recent weeks been at the center of speculation over a potential collapse.

A decision by Brazil's central bank to reduce reserve requirements for commercial banks was not motivated by the liquidation of troubled consumer lenders Banco Cruzeiro do Sul and Banco Prosper, a senior government official said on Thursday, Reuters reported. The bank lowered some requirements on deposits on Sept. 14, the same day it folded the banks for accounting fraud and losses. "The reserve requirements decision has nothing to do with the troubles facing some small banks.

Brazil's central bank ordered the liquidation of Banco Cruzeiro do Sul on Friday after no one stepped up to acquire the troubled lender, raising doubts about government oversight of small- and mid-sized banks, Reuters reported. The central bank also ordered the closure of Banco Prosper, another small bank facing a liquidity crunch that Cruzeiro do Sul had agreed to take over last November. The decision follows three months of talks between Cruzeiro do Sul's creditors, investors and rival banks to cut mounting debts and find a buyer for the São Paulo-based lender.

The administrator of Brazil's Banco Cruzeiro do Sul gave bondholders a few more hours on Thursday to agree to a debt buyback that is central to saving the lender from bankruptcy, Reuters reported. Privately owned deposit guarantee fund FGC planned to analyze bondholders' responses until 1800 local time (2100 GMT), buying more time to consider takeover bids for the lender, according to a securities filing. The prior deadline on the debt buyback expired at midnight Wednesday.

Shares of Banco Cruzeiro do Sul, the Brazilian consumer lender seized by the central bank in June, rose nearly 20 percent on Tuesday, one day before deposit guarantee fund FGC is scheduled to decide whether to liquidate the bank or sell it to a rival, Reuters reported. The bank failed to receive firm takeover bids last week as concern over a potential liquidation is scaring clients and potential buyers alike, according to local media reports on Monday. Read more.

Brazil's banks abruptly slowed the pace of loan disbursements in July as caution took center stage among private sector lenders seeking to protect earnings from near record delinquencies and a drop in borrowing costs, Reuters reported. Outstanding loans in the nation's banking system rose 0.7 percent to 2.183 trillion reais ($1.06 trillion) in July from June, the slowest pace of credit expansion on a monthly basis since February, the central bank said in a report on Thursday. In the 12 months ended in July, credit grew 17.7 percent, the slowest since April 2010.

Banco BVA, a Brazilian bank specializing in credit for mid-sized companies, will replenish its capital base in coming weeks after incurring a net loss in the first half, a source with direct knowledge of the situation told Reuters on Tuesday. The bank, which is controlled by founder José Augusto dos Santos and financier Ivo Lodo, will soon receive over 300 million reais ($146 million) in fresh money, said the source, who declined to be quoted since the plans remain private. The move should increase the bank's capital base to about 1 billion reais, the source added.

Brazil's privately held deposit guarantee fund ruled out improving terms of a bond repurchase for Banco Cruzeiro do Sul, which runs the risk of bankruptcy, O Estado de S. Paulo newspaper reported on Monday. The central bank seized the bank June. Bondholders of consumer lender Cruzeiro do Sul, who stand to lose half of their investment under a repurchase program, have questioned the plan, in an indication that they will press for a sweeter offer. The plan requires the approval of 90 percent of bondholders.