Business Park Torre V, Ave. La Rotonda,
Costa del Este
P.O. Box 0819-08730
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or 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):
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):
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 14, 2020
|
FOREIGN TRADE
BANK OF LATIN AMERICA, INC.
|
|
(Registrant)
|
|
|
|
|
|
|
By:
|
/s/
Ana Graciela de Méndez
|
|
|
|
|
|
Name: Ana
Graciela de Méndez
|
|
|
Title: CFO
|
BLADEX ANNOUNCES PROFIT
FOR THE FOURTH QUARTER 2019 OF $22.1 MILLION, OR $0.56 PER SHARE;
FULL YEAR 2019 PROFIT
OF $86.1 MILLION, OR $2.17 PER SHARE
PANAMA CITY, REPUBLIC
OF PANAMA, February 14, 2020
Banco Latinoamericano de Comercio Exterior,
S.A. (NYSE: BLX, “Bladex”, or “the Bank”), a Panama-based multinational bank originally established
by the central banks of 23 Latin-American and Caribbean countries to promote foreign trade and economic integration in the region,
today announced its results for the fourth quarter (“4Q19”) and full year (“FY19”) ended December 31,
2019.
The consolidated financial information
in this document has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued
by the International Accounting Standards Board (“IASB”).
FINANCIAL SNAPSHOT
(US$ million, except percentages and
per share amounts)
|
|
|
2019
|
|
|
|
2018
|
|
|
|
4Q19
|
|
|
|
3Q19
|
|
|
|
4Q18
|
|
Key Income Statement Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income ("NII")
|
|
$
|
109.5
|
|
|
$
|
109.7
|
|
|
$
|
26.9
|
|
|
$
|
26.7
|
|
|
$
|
28.0
|
|
Fees and commissions, net
|
|
$
|
15.6
|
|
|
$
|
17.2
|
|
|
$
|
5.4
|
|
|
$
|
2.8
|
|
|
$
|
5.4
|
|
Total revenues
|
|
$
|
126.7
|
|
|
$
|
127.6
|
|
|
$
|
31.4
|
|
|
$
|
29.5
|
|
|
$
|
34.1
|
|
(Impairment loss) reversal on financial instruments
|
|
$
|
(0.4
|
)
|
|
$
|
(57.5
|
)
|
|
$
|
1.9
|
|
|
$
|
(0.6
|
)
|
|
$
|
1.3
|
|
Gain (loss) on non-financial assets
|
|
$
|
0.5
|
|
|
$
|
(10.0
|
)
|
|
$
|
0.0
|
|
|
$
|
0.5
|
|
|
$
|
(2.3
|
)
|
Operating expenses
|
|
$
|
(40.7
|
)
|
|
$
|
(48.9
|
)
|
|
$
|
(11.3
|
)
|
|
$
|
(9.0
|
)
|
|
$
|
(12.4
|
)
|
Profit for the period
|
|
$
|
86.1
|
|
|
$
|
11.1
|
|
|
$
|
22.1
|
|
|
$
|
20.4
|
|
|
$
|
20.7
|
|
Profitability Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share ("EPS") (1)
|
|
$
|
2.17
|
|
|
$
|
0.28
|
|
|
$
|
0.56
|
|
|
$
|
0.52
|
|
|
$
|
0.52
|
|
Return on Average Equity (“ROAE”) (2)
|
|
|
8.6
|
%
|
|
|
1.1
|
%
|
|
|
8.7
|
%
|
|
|
8.0
|
%
|
|
|
8.3
|
%
|
Return on Average Assets (“ROAA”)
|
|
|
1.36
|
%
|
|
|
0.17
|
%
|
|
|
1.34
|
%
|
|
|
1.34
|
%
|
|
|
1.20
|
%
|
Net Interest Margin ("NIM") (3)
|
|
|
1.74
|
%
|
|
|
1.71
|
%
|
|
|
1.65
|
%
|
|
|
1.77
|
%
|
|
|
1.61
|
%
|
Net Interest Spread ("NIS") (4)
|
|
|
1.19
|
%
|
|
|
1.21
|
%
|
|
|
1.18
|
%
|
|
|
1.19
|
%
|
|
|
1.08
|
%
|
Efficiency Ratio (5)
|
|
|
32.1
|
%
|
|
|
38.3
|
%
|
|
|
35.9
|
%
|
|
|
30.4
|
%
|
|
|
36.3
|
%
|
Assets, Capital, Liquidity & Credit Quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Portfolio (6)
|
|
$
|
6,502
|
|
|
$
|
6,290
|
|
|
$
|
6,502
|
|
|
$
|
6,217
|
|
|
$
|
6,290
|
|
Investment Portfolio
|
|
$
|
80
|
|
|
$
|
107
|
|
|
$
|
80
|
|
|
$
|
85
|
|
|
$
|
107
|
|
Total assets
|
|
$
|
7,250
|
|
|
$
|
7,609
|
|
|
$
|
7,250
|
|
|
$
|
6,681
|
|
|
$
|
7,609
|
|
Total equity
|
|
$
|
1,016
|
|
|
$
|
994
|
|
|
$
|
1,016
|
|
|
$
|
1,009
|
|
|
$
|
994
|
|
Market capitalization (7)
|
|
$
|
847
|
|
|
$
|
684
|
|
|
$
|
847
|
|
|
$
|
790
|
|
|
$
|
684
|
|
Tier 1 Basel III Capital Ratio (8)
|
|
|
19.8
|
%
|
|
|
18.1
|
%
|
|
|
19.8
|
%
|
|
|
21.1
|
%
|
|
|
18.1
|
%
|
Total assets / Total equity (times)
|
|
|
7.1
|
|
|
|
7.7
|
|
|
|
7.1
|
|
|
|
6.6
|
|
|
|
7.7
|
|
Liquid Assets / Total Assets (9)
|
|
|
16.0
|
%
|
|
|
22.4
|
%
|
|
|
16.0
|
%
|
|
|
14.4
|
%
|
|
|
22.4
|
%
|
Credit-impaired loans to Loan Portfolio (10)
|
|
|
1.05
|
%
|
|
|
1.12
|
%
|
|
|
1.05
|
%
|
|
|
1.11
|
%
|
|
|
1.12
|
%
|
Total allowance for losses to Commercial Portfolio (11)
|
|
|
1.57
|
%
|
|
|
1.65
|
%
|
|
|
1.57
|
%
|
|
|
1.67
|
%
|
|
|
1.65
|
%
|
Total allowance for losses to credit-impaired loans (times) (11)
|
|
|
1.7
|
|
|
|
1.6
|
|
|
|
1.7
|
|
|
|
1.7
|
|
|
|
1.6
|
|
FY19 & 4Q19 Highlights
·
|
Profit
for FY19 totaled $86.1 million, compared to $11.1 million in FY18, primarily from lower
impairment losses and improved operating efficiency on reduced operating expenses (-17%
YoY), along with steady top-line revenues YoY.
|
·
|
Bladex’s
4Q19 profit increased 8% QoQ and 7% YoY to $22.1 million, or $0.56 per share, as improved
revenues and reversal of impairment losses offset higher operating expenses QoQ.
|
·
|
Net
Interest Income (“NII”) for FY19 totaled $109.5 million (stable YoY) with
Net Interest Margin (“NIM”) of 1.74% (+3 bps), and Net Interest Spread (“NIS”)
nearly stable at 1.19%. NII for the 4Q19 improved 1% QoQ to $26.9 million, mainly on
higher average lending volumes. The quarterly YoY decrease of 4% was mainly due to lower
lending spreads and the net effect of lower average market rates, partly compensated
by the decrease in average low-yielding liquidity assets.
|
·
|
Fees
and commissions income totaled $15.6 million for FY19, -9% YoY on lower fees from letters
of credit (-12% YoY). The Bank closed six syndicated transactions in FY19 for a total
of $5.6 million, up from $4.9 million in FY18. In 4Q19, fees totaled $5.4 million from
structured transactions and improved fees from the Bank’s letters of credit business,
up 4% QoQ and up 7% from 4Q18.
|
·
|
Efficiency
Ratio was 32% for FY19 (-6pts YoY) as operating expenses decreased 17% YoY with total
revenues nearly stable (-1% YoY), reflecting effective cost control management and overall
improved structural and operational efficiencies. 4Q19 Efficiency Ratio was 36% (+6pts
QoQ; stable YoY) as improved revenues QoQ were offset by higher operating expenses from
employee-related expenses and other seasonal expenses.
|
·
|
Return
on Average Equity (“ROAE”) was 8.6% in FY19 compared to 1.1% in FY18. 4Q19
annualized ROAE was 8.7% vs. 8.0% in 3Q19 and 8.3% in 4Q18. The Bank’s capitalization
remained solid with Tier 1 Basel III Capital Ratio of 19.8%, with risk-weighted assets
up QoQ due to Commercial Portfolio growth and down YoY due to a shift to a lower risk
country exposure of the portfolio.
|
·
|
End-of-period
Commercial Portfolio balances increased 5% QoQ and 3% YoY to $6.5 billion in 4Q19. Average
balances were up to $6.2 billion for the 4Q19 (+6% QoQ; stable YoY) and $6.1 billion
for FY19 (stable YoY).
|
·
|
Credit-impaired
Loans, also referred to as Non-Performing Loans or NPLs, were $61.8 million, or 1.0%
of total Loan Portfolio, at the end of 4Q19. This compares to $64.7 million, or 1.1%
of total Loan Portfolio, a year ago. No new NPLs were recorded during 2019. Total allowance
for credit losses was 1.7 times NPL balances for 4Q19.
|
CEO’s Comments
Mr. N. Gabriel Tolchinsky, Bladex’s
Chief Executive Officer said, “In 2019, the global economy experienced its weakest year of growth since the financial
crisis, weighed down by tensions that have significantly slowed international trade. The main drivers for the lackluster performance
were the trade war between the US and China, negative trade flows that disrupted supply chains, and idiosyncratic risks in some
countries.
2019 was also a very difficult
year for Latin America regionally. Economic growth came in significantly below beginning of year expectations and significantly
below last year’s levels. Of the largest three economies of Latin America, Brazil was the only one that showed any signs
of life, though growing tepidly, while Mexico stagnated, a remarkable decoupling from a strong US economy and Argentina´s
GDP shrank.
We regard Brazil as the main
potential driver for economic growth in the Region. That said, Colombia and Peru should also perform well. But with (a) commodity
prices depressed because of trade uncertainties and a strong US dollar, (b) Mexico stuck in low or no growth mode due to needed
fiscal restraint, tight monetary policy to keep portfolio moneys flowing and a fundamental lack of investment, (c) potential social
unrest in Chile and (d) smaller countries like Costa Rica mired in a fiscal red ink and Ecuador struggling to comply with the
IMF program, we simply do not see other countries as significant contributors to Regional growth.
We continue to believe that
the current macroeconomic context offers no room for complacency. Furthermore, low growth combined with risk aversion is exacerbating
liquidity for top names in the Region, compressing their margins, while not always compensating for the risk these credits represent.
Nevertheless, Bladex´s
book of business is solid as we have been able to add new clients, shift exposures to lower risk jurisdictions and structure value
added transactions. We achieved our current profitability levels despite this very challenging environment. Over the past two
years, macroeconomic risks, slow regional economic growth, tepid trade flows, idiosyncratic country and industry risks have been
the norm. And, all these risks were coupled with an overwhelming amount of liquidity chasing the same creditworthy clients. If
Bladex can deliver 8.6% ROAE with these headwinds, we should be very well positioned to deliver more sizeable returns in more
benign environments that surely will come. We are keenly aware of the risks in the Region’s industries and entities we finance.
And, I can say with confidence that our team knows how to spot opportunities and deliver results.
We continue to diversify
our funding sources beyond our typical Central Bank deposits, bilateral lines of credit, capital markets and international borrowings.
We recently started a new Yankee CD program that will complement our short-term funding structure.
On the cost side, expenses
continue to stay under control.
Against this backdrop, the
management of Bladex, and its Board of Directors, is cautiously optimistic for 2020 and look for a continuation of the profitability
path we embarked on in the last five quarters.”
RECENT EVENTS
|
§
|
Quarterly
dividend payment: The Bank’s Board of Directors (the “Board”) approved
a quarterly common dividend of $0.385 per share corresponding to the fourth quarter 2019.
The cash dividend will be paid on March 12, 2020, to shareholders registered as of February
26, 2020.
|
|
§
|
Appointment
of Director: After a thorough selection process, the Board appointed Ms. Alexandra
M. Aguirre as Director representing all classes of shares, in replacement of Mr. Gonzalo
Menendez Duque, who passed away on June 29, 2019. Ms. Aguirre will serve for the remainder
of the term, set to expire in April of 2021.
|
|
§
|
CEO
succession: As part of an orderly and programmed succession plan, the Board announced
on January 27, 2020, that, effective March 9, 2020, Mr. N. Gabriel Tolchinsky will step
down as Chief Executive Officer, and will be succeeded by Mr. Jorge Salas.
|
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:
|
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.
|
|
3)
|
NIM refers
to net interest margin which constitutes to Net Interest Income (“NII”) divided
by the average balance of interest-earning assets.
|
|
4)
|
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.
|
|
5)
|
Efficiency
Ratio refers to consolidated operating expenses as a percentage of total revenues.
|
|
6)
|
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.
|
|
7)
|
Market capitalization
corresponds to total outstanding common shares multiplied by market close price at the
end of each corresponding period.
|
|
8)
|
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.
|
|
9)
|
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.
|
|
10)
|
Credit-impaired
loans are also commonly referred to as Non-Performing Loans or NPLs. Loan Portfolio refers
to gross loans, excluding interest receivable, the allowance for loan losses, and unearned
interest and deferred fees.
|
|
11)
|
Total allowance
for losses refers to allowance for loan losses plus allowance for loan commitments and
financial guarantee contract 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, and the United States of America, and a Representative License in Peru, 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 Friday, February 14, 2020 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: 44638262.
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