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Latin America Bank Retreat Raises Integration Need, Says IMF

Global banks’ withdrawal from Latin America since the global financial crisis could undermine domestic banking systems just as the region requires substantial funding to ignite economic growth, according to a report from the International Monetary Fund.

Brazil’s Banco Bradesco SA in July announced the $5.2 billion purchase of HSBC Holdings Plc’s local retail unit, raising concern in the local antitrust regulator of reduced competition. Citigroup Inc. is seeking buyers for its retail banking operations in Brazil, Argentina and Colombia, and Deutsche Bank is retreating from several nations in the region. Departing banks should be replaced by crossborder institutions to maintain competition and efficiency, according to the IMF report.