Report of Foreign Issuer (6-k)
February 28 2019 - 5:31PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE
SECURITIES EXCHANGE ACT OF 1934
Short Form of Press Release
Commission File Number 1-11414
BANCO
LATINOAMERICANO DE COMERCIO EXTERIOR, S.A.
(Exact name of Registrant as specified in
its Charter)
FOREIGN
TRADE BANK OF LATIN AMERICA, INC.
(Translation of Registrant’s name
into English)
Business Park Torre V, Ave. La Rotonda,
Costa del Este
P.O. Box 0819-08730
Panama City, Republic of Panama
(Address of Registrant’s Principal
Executive Offices)
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F
x
Form 40-F
¨
Indicate by check mark if the registrant
is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes
¨
No
x
Indicate by check mark if the registrant
is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes
¨
No
x
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: February 28, 2019
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FOREIGN TRADE BANK OF LATIN AMERICA, INC.
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(Registrant)
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By:
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/s/ Ana Graciela de Méndez
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Name: Ana Graciela de Méndez
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Title: CFO
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BLADEX ANNOUNCES PROFIT FOR THE FOURTH
QUARTER 2018 OF $20.7 MILLION, OR $0.52 PER SHARE;
FULL-YEAR 2018 PROFIT OF $11.1 MILLION,
OR $0.28 PER SHARE
PANAMA CITY, REPUBLIC OF PANAMA, February
28, 2019
Banco Latinoamericano de Comercio Exterior,
S.A.
(NYSE: BLX, “Bladex”, or “the Bank”), a Panama-based multinational bank originally established
by the central banks of 23 Latin-American and Caribbean countries to promote foreign trade and economic integration in the region,
today announced its results for the fourth quarter (“4Q18”) and Full-Year (“FY18”) ended December 31, 2018.
The consolidated financial information
in this document has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued
by the International Accounting Standards Board (“IASB”).
FINANCIAL SNAPSHOT
(US$ million, except percentages and
per share amounts)
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2018
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2017
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4Q18
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3Q18
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4Q17
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Key Income Statement Highlights
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Net Interest Income ("NII")
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$
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109.7
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$
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119.8
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$
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28.0
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$
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27.3
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$
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28.1
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Fees and commissions, net
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$
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17.2
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$
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17.5
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$
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5.4
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$
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3.7
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$
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5.7
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Total revenues
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$
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127.6
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$
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138.3
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$
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34.1
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$
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30.1
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|
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$
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34.5
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(Impairment loss) recovery on financial instruments
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$
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(57.5
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)
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$
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(9.4
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)
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$
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1.3
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$
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(55.1
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)
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$
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(0.8
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)
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Impairment loss on non-financial assets
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$
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(10.0
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)
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$
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0.0
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$
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(2.3
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)
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$
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(4.8
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)
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$
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0.0
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Operating expenses
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$
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(48.9
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)
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$
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(46.9
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)
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$
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(12.4
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)
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$
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(10.9
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)
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$
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(13.1
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)
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Profit (Loss) for the period
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$
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11.1
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$
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82.0
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$
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20.7
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$
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(40.7
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)
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$
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20.6
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Profitability Ratios
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Earnings per Share ("EPS")
(1)
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$
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0.28
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$
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2.09
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$
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0.52
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$
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(1.03
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)
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$
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0.52
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Return on Average Equity (“ROAE”)
(2)
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1.1
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%
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8.0
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%
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8.3
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%
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-15.5
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%
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|
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7.9
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%
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Return on Average Assets (“ROAA”)
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0.17
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%
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1.27
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%
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1.20
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%
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-2.58
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%
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1.31
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%
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Net Interest Margin ("NIM")
(3)
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1.71
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%
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1.85
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%
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1.61
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%
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1.74
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%
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|
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1.78
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%
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Net Interest Spread ("NIS")
(4)
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1.21
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%
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1.48
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%
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1.08
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%
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1.20
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%
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1.38
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%
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Efficiency Ratio
(5)
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38.3
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%
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33.9
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%
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36.3
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%
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36.0
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%
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38.0
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%
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Assets, Capital, Liquidity & Credit Quality
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Commercial Portfolio
(6)
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$
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6,290
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$
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5,999
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$
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6,290
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$
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6,305
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$
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5,999
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Treasury Portfolio
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$
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107
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$
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86
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$
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107
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$
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93
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|
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$
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86
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Total assets
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$
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7,609
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|
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$
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6,268
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$
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7,609
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|
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$
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6,561
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|
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$
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6,268
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Total stockholders' equity
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$
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994
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$
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1,043
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$
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994
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$
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989
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$
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1,043
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Market capitalization
(7)
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$
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684
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$
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1,061
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$
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684
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$
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975
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$
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1,061
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Tier 1 Basel III Capital Ratio
(8)
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18.1
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%
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21.1
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%
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18.1
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%
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17.8
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%
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21.1
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%
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Total assets / Total stockholders' equity (times)
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7.7
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6.0
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7.7
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6.6
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6.0
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Liquid Assets / Total Assets
(9)
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22.4
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%
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9.9
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%
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22.4
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%
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11.7
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%
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9.9
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%
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NPL to Loan Portfolio
(10)
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1.12
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%
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1.07
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%
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1.12
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%
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2.08
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%
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1.07
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%
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Total allowance for
losses
(11)
to Commercial Portfolio
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1.65
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%
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1.47
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%
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1.65
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%
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2.26
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%
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1.47
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%
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Total allowance for
losses
(11)
to NPL (times)
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1.6
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1.5
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1.6
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1.2
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1.5
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4Q18 & FY18 Highlights
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·
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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.
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·
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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.
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·
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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.
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·
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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.
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·
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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.
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·
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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.
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·
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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.
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·
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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.
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·
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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).
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·
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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.
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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
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§
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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.
|
|
§
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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.
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Notes:
|
-
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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:
|
1)
|
Earnings per Share (“EPS”) calculation is based on the average number of shares outstanding
during each period.
|
|
2)
|
ROAE refers to return on average stockholders’ equity which is calculated on the basis of
unaudited daily average balances.
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3)
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NIM refers to net interest margin which constitutes to net interest income divided by the average
balance of interest-earning assets.
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4)
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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.
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5)
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Efficiency Ratio refers to consolidated operating expenses as a percentage of total revenues.
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6)
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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.
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7)
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Market capitalization corresponds to total outstanding common shares multiplied by market close
price at the end of each corresponding period.
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8)
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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.
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9)
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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.
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10)
|
Loan Portfolio refers to loans, gross of the allowance for loan losses and unearned interest and
deferred fess.
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11)
|
Total allowance for losses refers to allowance for loans losses plus allowance for loan commitments
and financial guarantee contracts losses.
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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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