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BRICs Meet in Brazil, Create Bloc Development Bank

BRICs Meet in Brazil, Create Bloc Development Bank

Los Angeles, CA – Leaders of the BRICS group of emerging powers – Brazil, Russia, India, China and South Africa – have decided to create their own development bank as a counterweight to what they perceive are “western-dominated” financial organizations like the US-based World Bank and International Monetary Fund.

The move came during the BRICS Summit earlier this week in Fortaleza, Brazil. The summit comes as the five countries, whose economies together represent 18 percent of the world total, are experiencing sharp slowdowns in their once fast-paced rates of growth.

The new development bank will reportedly be based in Shanghai and is expected to be functional within two years. It will be capitalized at $50 billion, a figure that could grow to $100 billion to fund infrastructure projects. The fund would also have $100 billion at its disposal to weather economic hard times.

The new development bank’s first director will reportedly be from India.

“We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness,” the group said in a joint press release.

The BRICs leaders are now in the Brazilian capital of Brasilia, meeting with their counterparts from Argentina, Chile, Colombia, Ecuador, Venezuela and several other Latin American nations to discuss future economic and trade cooperation.

BRIC giant China is particularly interested in Latin America. After this week’s discussions, Chinese President Xi Jinping will stay in Brazil to launch a China-Latin America forum with the leaders of several regional countries including Cuba, Argentina, Ecuador, and Venezuela.

China is growing in influence in the region. Last year, the country, two-way trade with the region amounted to more than $261 billion.


Citigroup Continues Divesting Consumer Banking Business

New York, NY – Citigroup Inc. has said it will further “streamline its international operations” by divesting itself of its consumer banking business in Spain.

The sale of Citigroup’s Spanish business to Madrid-based Banco Popular includes $3.2 billion in assets under management, GAAP assets of nearly $2 billion along with $2 billion in loans and $2.8 billion in deposits.

More than 1.2 million customer accounts, 45 branches and ATMs as well as roughly 950 employees will be transferred to Banco Popular.

Citigroup said, however, it will continue to operate its Spanish investment and corporate-banking units.

The sale is part of the bank’s previously announced strategy to relieve itself of the non-core assets of Citi Holdings. The company has been shedding distressed assets from its Citi Holdings unit to drive earnings.

In April, Citigroup announced the sale of its consumer banking business in Honduras to Banco Financiera Comercial Hondurena SA, a subsidiary of Grupo Financiero Ficohsa.

Similar moves were undertaken by the company last year as well with the divestiture of retail banking operations in Uruguay to Brazil-based Itau Unibanco Holding SA and consumer banking unit in Turkey to DenizBank, the Turkish unit of Russia-based Sberbank Rossii.