PANAMA CITY, Feb. 28, 2019 /PRNewswire/ -- Banco
Latinoamericano de Comercio Exterior, S.A. (NYSE: BLX,
"Bladex", or "the Bank"), a Panama-based multinational bank originally
established by the central banks of 23 Latin-American and
Caribbean countries to promote
foreign trade and economic integration in the region, today
announced its results for the fourth quarter ("4Q18") and Full-Year
("FY18") ended December 31,
2018.
The consolidated financial information in this document has been
prepared in accordance with International Financial Reporting
Standards ("IFRS") as issued by the International Accounting
Standards Board ("IASB").
FINANCIAL
SNAPSHOT
|
|
|
|
|
|
|
(US$ million, except
percentages and
per share amounts)
|
2018
|
2017
|
4Q18
|
3Q18
|
4Q17
|
Key Income
Statement
Highlights
|
|
|
|
|
|
Net Interest Income
("NII")
|
$109.7
|
$119.8
|
$28.0
|
$27.3
|
$28.1
|
Fees and commissions,
net
|
$17.2
|
$17.5
|
$5.4
|
$3.7
|
$5.7
|
Total
revenues
|
$127.6
|
$138.3
|
$34.1
|
$30.1
|
$34.5
|
(Impairment loss)
recovery on
financial instruments
|
($57.5)
|
($9.4)
|
$1.3
|
($55.1)
|
($0.8)
|
Impairment loss on
non-financial
assets
|
($10.0)
|
$0.0
|
($2.3)
|
($4.8)
|
$0.0
|
Operating
expenses
|
($48.9)
|
($46.9)
|
($12.4)
|
($10.9)
|
($13.1)
|
Profit (Loss) for the
period
|
$11.1
|
$82.0
|
$20.7
|
($40.7)
|
$20.6
|
Profitability
Ratios
|
|
|
|
|
|
Earnings per Share
("EPS") (1)
|
$0.28
|
$2.09
|
$0.52
|
($1.03)
|
$0.52
|
Return on Average
Equity ("ROAE")(2)
|
1.1%
|
8.0%
|
8.3%
|
-15.5%
|
7.9%
|
Return on Average
Assets ("ROAA")
|
0.17%
|
1.27%
|
1.20%
|
-2.58%
|
1.31%
|
Net Interest Margin
("NIM")(3)
|
1.71%
|
1.85%
|
1.61%
|
1.74%
|
1.78%
|
Net Interest Spread
("NIS")(4)
|
1.21%
|
1.48%
|
1.08%
|
1.20%
|
1.38%
|
Efficiency
Ratio(5)
|
38.3%
|
33.9%
|
36.3%
|
36.0%
|
38.0%
|
Assets, Capital,
Liquidity &
Credit Quality
|
|
|
|
|
|
Commercial
Portfolio(6)
|
$6,290
|
$5,999
|
$6,290
|
$6,305
|
$5,999
|
Treasury
Portfolio
|
$107
|
$86
|
$107
|
$93
|
$86
|
Total
assets
|
$7,609
|
$6,268
|
$7,609
|
$6,561
|
$6,268
|
Total stockholders'
equity
|
$994
|
$1,043
|
$994
|
$989
|
$1,043
|
Market
capitalization(7)
|
$684
|
$1,061
|
$684
|
$975
|
$1,061
|
Tier 1 Basel III
Capital Ratio (8)
|
18.1%
|
21.1%
|
18.1%
|
17.8%
|
21.1%
|
Total assets / Total
stockholders'
equity (times)
|
7.7
|
6.0
|
7.7
|
6.6
|
6.0
|
Liquid Assets / Total
Assets (9)
|
22.4%
|
9.9%
|
22.4%
|
11.7%
|
9.9%
|
NPL to Loan
Portfolio(10)
|
1.12%
|
1.07%
|
1.12%
|
2.08%
|
1.07%
|
Total allowance for
losses(11)to
Commercial Portfolio
|
1.65%
|
1.47%
|
1.65%
|
2.26%
|
1.47%
|
Total allowance for
losses(11)to
NPL (times)
|
1.6
|
1.5
|
1.6
|
1.2
|
1.5
|
4Q18 & FY18 Highlights
- Bladex reported a profit of $20.7
million in 4Q18, compared to a loss of $40.7 million in 3Q18, on quarterly improvement
of top line revenues (+13% QoQ), and lower impairment losses. 4Q18
Profit increased 1% YoY, reflecting stable total revenues (-1% YoY)
and improved efficiency.
- For the year, the Bank's $11.1
million profit was primarily impacted by impairment loss on
financial instruments for $57.5
million, from credit provisions associated to credit
impaired loans (Non-Performing Loans or "NPLs"), mainly in
Brazil's sugar sector. The Bank
also incurred a $10.0 million
impairment loss on non-financial assets, related to credit
restructurings and to the disposal of obsolete technology, in line
with the Bank's objective to optimize its operating platform.
- Net Interest Income ("NII") for the 4Q18 increased 2% QoQ to
$28.0 million (-1% YoY). Net
Interest Margin ("NIM") decreased by 13bps to 1.61% QoQ due to
higher than anticipated increases in central bank deposits at year
end, resulting in significant liquidity positions of low yielding
assets.
- NII for FY18 totaled $109.7
million, 8% lower YoY, mostly impacted by a 14bps decrease
in NIM to 1.71%, on narrower net lending spreads from a portfolio
with exposure to high quality borrowers such as systemic financial
institutions, sovereign and quasi-sovereign entities, and USD
generating top-tier corporate clients.
- Fees and Commissions income totaled $5.4
million in 4Q18 (+46% QoQ;
-5% YoY), and $17.2 million for all
of 2018 (-2% YoY). The upward trend in commissions from letters of
credit was offset by lower loan structuring fees. Bladex
closed seven syndicated transactions in 2018.
- Operating expenses were $12.4
million in 4Q18 (+14% QoQ; -6% YoY), and $48.9 million in FY18 (+4% YoY). The annual
increase in expenses was primarily attributable to non-recurring
charges from personnel restructuring and the streamlining of
processes and of technological infrastructure. Efficiency
Ratio stood at 36% for 4Q18 and
38% for FY18.
- NPL balances decreased to $64.7
million, or 1.12% of total Loan Portfolio balances at the
end of 4Q18. This compares to $119.0
million, or 2.08%, at the end of 3Q18, and to $58.8 million, or 1.07%, at the end of 4Q17. The
decrease was primarily associated with loan restructurings,
collections through sales and partial write-offs against
individually allocated allowances for expected credit losses.
- Allowance for credit losses on the Commercial Portfolio totaled
$104.1 million at year-end 2018, or
1.65% of the portfolio from 1.47% YoY, representing a reserve
coverage of 1.6 times NPL balances.
- End-of-period Commercial Portfolio balances increased by 5% YoY
and remained stable QoQ at $6.3
billion. Average balances were up to $6.2 billion in 4Q18 (+3% QoQ; +6% YoY) and to
$6.0 billion in FY18 (+3% YoY).
- The Bank's Tier 1 Basel III Capital Ratio remained solid at
18.1%, with increased level of risk-weighted assets reflecting
annual Commercial Portfolio growth.
CEO'S Comments
Mr. N. Gabriel Tolchinsky,
Bladex's Chief Executive Officer, said, "In our third
quarter 2018 conference call we mentioned that the credit quality
of our portfolio, cost structure and allowances for expected
credit losses, set the base to improve our earnings generation
capacity. Our fourth quarter 2018 earnings are the first step
in that direction.
Although still sub-par, growth rates of 2% – or slightly
higher – are now possible for Latin
America in 2019, we saw some recent positive news.
Jair Bolsonaro's election hit the ground running with several
market friendly announcements regarding opening the Brazilian
economy and introducing fiscal adjustments reforms. The USMCA
was a bright spot in an otherwise grim picture from Mexico.
Argentina completed its IMF
agreement, without the social unrest feared by some.
Even Costa Rica, which stretched the
patience of the rating agencies, managed to approve in their famous
Sala IV a fiscal reform package.
That said, problem spots such as Mexico, which seems to be deviating from the
macroeconomic policies established over the last 20 years, and
Argentina, which is in the midst
of a recession generated by restrictive IMF policies, will continue
to increase volatility and dampen growth expectations.
At the same time, macroeconomic global risks are
intensifying. Now we need to add the prospects of slowing
economies in Europe and
China (and possibly the U.S.) to a
tense protectionist trade environment.
What does this all mean for Bladex? A macroeconomic
context that offers no room for complacency as risks of major
economies slowing and trade tensions continuing are partially
counterbalanced by a somewhat better macroeconomic picture in a few
key countries in Latin
America.
Although our headline margins were impacted by low yielding
liquidity due to higher than expected central bank deposits, Bladex
continues to improve its origination. We have a better mix of
medium-term to short-term loans, thereby lengthening the average
life of our portfolio and increasing our origination
margins.
Our NPLs declined due to asset sales, restructurings and
partial write-offs. Our Tier 1 capital ratio remains
strong. Our book value remains solid over $25 a share. On this basis, Bladex's Board
of Directors approved to maintain our quarterly dividend.
Against this backdrop, both the management of Bladex, and its
Board of Directors are cautiously optimistic for 2019 and look for
an improvement in profitability throughout the year."
RECENT EVENTS
- Quarterly dividend payment: The Bank's Board of
Directors approved a quarterly common dividend of $0.385 per share corresponding to the fourth
quarter 2018. The dividend will be paid on March 26, 2019, to stockholders registered as of
March 11, 2019.
- Ratings updates: On October
29, 2018, Moody's Investors Service affirmed the Bank's
long- and short-term foreign currency deposit and senior unsecured
debt ratings at 'Baa2/P-2', respectively. The outlook
remained negative.
Notes:
- Numbers and percentages set
forth in this earnings release have been rounded and accordingly
may not total exactly.
- QoQ and YoY refer to
quarter-on-quarter and year-on-year variations,
respectively.
Footnotes:
- Earnings per Share ("EPS") calculation is based on the average
number of shares outstanding during each period.
- ROAE refers to return on average stockholders' equity which is
calculated on the basis of unaudited daily average balances.
- NIM refers to net interest margin which constitutes to net
interest income divided by the average balance of interest-earning
assets.
- NIS refers to net interest spread which constitutes the average
yield earned on interest-earning assets, less the average yield
paid on interest-bearing liabilities.
- Efficiency Ratio refers to
consolidated operating expenses as a percentage of total
revenues.
- The Bank's "Commercial Portfolio" includes gross loans (or the
"Loan Portfolio"), loan commitments and financial guarantee
contracts, such as issued and confirmed letters of credit, stand-by
letters of credit, guarantees covering commercial risk and other
assets consisting of customers' liabilities under acceptances.
- Market capitalization corresponds to total outstanding common
shares multiplied by market close price at the end of each
corresponding period.
- Tier 1 Capital is calculated according to Basel III capital
adequacy guidelines, and is equivalent to stockholders' equity
excluding certain effects such as the OCI effect of the financial
instruments at fair value through OCI. Tier 1 Capital ratio
is calculated as a percentage of risk-weighted assets.
Risk-weighted assets are estimated based on Basel III capital
adequacy guidelines.
- Liquid assets refer to total cash and cash equivalents,
consisting of cash and due from banks, and interest-bearing
deposits in banks, excluding pledged deposits and margin
calls. Liquidity ratio refers to liquid assets as a
percentage of total assets.
- Loan Portfolio refers to loans, gross of the allowance for loan
losses and unearned interest and deferred fess.
- Total allowance for losses refers to allowance for loans losses
plus allowance for loan commitments and financial guarantee
contracts losses.
SAFE HARBOR STATEMENT
This press release contains forward-looking statements of
expected future developments within the meaning of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements in this press release include the growth of the credit
portfolio, including the trade portfolio, the increase in the
number of the Bank's corporate clients, the trend of lending
spreads, changes in activities engaged in by the Bank that are
derived from the Bank's client base, anticipated operating results
and return on equity in future periods, including income derived
from the Treasury Business Segment, and changes in the
financial and performance strength of the Bank. These
forward-looking statements reflect the expectations of the Bank's
management and are based on currently available data; however,
actual performance and results are subject to future events and
uncertainties, which could materially impact the Bank's
expectations. Among the factors that can cause actual
performance and results to differ materially are as follows: the
anticipated changes in the Bank's credit portfolio; the
continuation of the Bank's preferred creditor status; the impact of
increasing/decreasing interest rates and of the macroeconomic
environment in the Region on the Bank's financial condition; the
execution of the Bank's strategies and initiatives, including its
revenue diversification strategy; the adequacy of the Bank's
allowance for expected credit losses; the need for additional
allowance for expected credit losses; the Bank's ability to achieve
future growth, to reduce its liquidity levels and increase its
leverage; the Bank's ability to maintain its investment-grade
credit ratings; the availability and mix of future sources of
funding for the Bank's lending operations; potential trading
losses; the possibility of fraud; and the adequacy of the Bank's
sources of liquidity to replace deposit withdrawals. Factors or
events that could cause our actual results to differ may emerge
from time to time, and it is not possible for us to predict all of
them. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
ABOUT BLADEX
Bladex, a multinational bank originally established by the
central banks of Latin-American and Caribbean countries, began operations in 1979
to promote foreign trade and economic integration in the Region.
The Bank, headquartered in Panama,
also has offices in Argentina,
Brazil, Colombia, Mexico, Peru,
and the United States of America,
supporting the regional expansion and servicing its customer base,
which includes financial institutions and corporations.
Bladex is listed on the NYSE in the
United States of America (NYSE: BLX), since 1992, and its
shareholders include: central banks and state-owned banks and
entities representing 23 Latin American countries; commercial banks
and financial institutions; and institutional and retail investors
through its public listing.
CONFERENCE CALL INFORMATION
There will be a conference call to discuss the Bank's quarterly
results on Thursday, February 28,
2019 at 11:00 a.m.
New York City time (Eastern
Time). For those interested in participating, please dial
(800) 311-9401 in the United
States or, if outside the United
States, (334) 323-7224. Participants should use
conference ID# 8034, and dial in five minutes before the call is
set to begin. There will also be a live audio webcast of the
conference at http://www.bladex.com. The webcast presentation
will be available for viewing and downloads on
http://www.bladex.com.
The conference call will become available for review on
Conference Replay one hour after its conclusion, and will remain
available for 60 days. Please dial (877) 919-4059 or (334)
323-0140, and follow the instructions. The replay passcode
is: 43528324.
For more information, please access http://www.bladex.com or
contact:
Mrs. Ana Graciela de Méndez
Chief Financial Officer
Tel: +507 210-8563
E-mail address: amendez@bladex.com
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SOURCE Banco Latinoamericano de Comercio Exterior, S.A.
(Bladex)