PANAMA CITY, April 15, 2020 /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 first quarter ("1Q20") ended
March 31, 2020.
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)
|
1Q20
|
4Q19
|
1Q19
|
Key Income
Statement Highlights
|
|
|
|
Net Interest Income
("NII")
|
$25.8
|
$26.9
|
$28.0
|
Fees and commissions,
net
|
$3.1
|
$5.4
|
$2.4
|
Total
revenues
|
$28.8
|
$31.4
|
$32.1
|
Reversal (impairment
loss) on financial instruments
|
$0.1
|
$1.9
|
($0.9)
|
Operating
expenses
|
($10.5)
|
($11.3)
|
($9.9)
|
Profit for the
period
|
$18.3
|
$22.1
|
$21.2
|
Profitability
Ratios
|
|
|
|
Earnings per Share
("EPS") (1)
|
$0.46
|
$0.56
|
$0.54
|
Return on Average
Equity ("ROAE")(2)
|
7.2%
|
8.7%
|
8.6%
|
Return on Average
Assets ("ROAA")
|
1.12%
|
1.34%
|
1.31%
|
Net Interest Margin
("NIM")(3)
|
1.59%
|
1.65%
|
1.74%
|
Net Interest Spread
("NIS")(4)
|
1.16%
|
1.18%
|
1.16%
|
Efficiency
Ratio(5)
|
36.7%
|
35.9%
|
30.8%
|
Assets, Capital,
Liquidity & Credit Quality
|
|
|
|
Credit
Portfolio(6)
|
$5,911
|
$6,582
|
$6,096
|
Commercial
Portfolio(7)
|
$5,832
|
$6,502
|
$6,006
|
Investment
Portfolio
|
$79
|
$80
|
$90
|
Total
assets
|
$6,823
|
$7,250
|
$6,450
|
Total
equity
|
$1,018
|
$1,016
|
$997
|
Market
capitalization(8)
|
$408
|
$847
|
$788
|
Tier 1 Basel III
Capital Ratio (9)
|
21.8%
|
19.8%
|
20.1%
|
Total assets / Total
equity (times)
|
6.7
|
7.1
|
6.5
|
Liquid Assets / Total
Assets (10)
|
19.0%
|
16.0%
|
11.9%
|
Credit-impaired loans
to Loan Portfolio(11)
|
1.16%
|
1.05%
|
1.18%
|
Total allowance for
losses to Credit Portfolio(12)
|
1.73%
|
1.56%
|
1.73%
|
Total allowance for
losses to credit-impaired loans (times)(12)
|
1.7
|
1.7
|
1.6
|
1Q20 Highlights
- Bladex reported a financial position at March 31, 2020, characterized by its prudent
liquidity management and ample cash position, its solid level of
capitalization, and sound asset quality. In the context of the
recent and rapidly evolving adverse effects from the coronavirus
outbreak ("Covid-19"), these represent strong foundations on which
to operate the business.
- As of March 31, 2020, the Bank's
liquidity increased to $1.3 billion
(+12% QoQ; +68% YoY), representing 19% of total assets and 53% of
total deposits; 98% of cash and deposits on banks was placed with
the Federal Reserve Bank of New
York.
- The Bank's Tier 1 Basel III Capital Ratio reached 21.8%,
reflecting a stronger capitalization level than prior comparative
periods, resulting from an increasing equity base and lower
risk-weighted assets. The latter relates to the Bank's ability to
decrease its Commercial Portfolio toward the end of the quarter, on
the onset of the COVID-19 crisis, which led to prudent measures,
including preserving liquidity and stricter credit
underwriting.
- Commercial Portfolio totaled $5.8
billion at March 31, 2020
(-10% QoQ; -3% YoY) with improved quality exposure, as 55% of the
portfolio was in investment grade countries. Also, exposure to
financial institutions was 55%, and 15% to quasi-sovereign
corporations, with the remainder to top-tier corporations
throughout the Region. 1Q20 average Commercial Portfolio balance
was nearly stable at $6.2 billion
(-1% QoQ; +2% YoY).
- Bladex's Profit for 1Q20 totaled $18.3
million (-17% QoQ; -14% YoY) resulting in an annualized
Return on Average Equity ("ROAE") of 7.2% for the period. The
Bank's profitability in 1Q20 was pressured by lower income
generation from Net Interest Income ("NII"), and the seasonal
effect on syndication fees and other income. The QoQ decrease was
also impacted by reversal of impairment losses registered in the
previous quarter.
- Net Interest Income ("NII") for 1Q20 was $25.8 million (-4% QoQ; -8% YoY), with a Net
Interest Margin ("NIM") of 1.59% (-6 bps QoQ; -15 bps YoY) and a
Net Interest Spread ("NIS") nearly stable at 1.16%. The quarterly
decreases of NII and NIM were mostly associated with the net effect
of lower average market rates (LIBOR-based) partially offset by
higher average lending volumes.
- Fees and commissions income totaled $3.1
million for 1Q20, a 31% YoY increase driven by higher fees
from letters of credit (+14% YoY) and loan syndication (+$0.4
million). The 43% QoQ decrease was mostly due to the uneven effect
of the syndication business, despite the good performance of the
Bank's letters of credit business.
- 1Q20 Efficiency Ratio was 37% (+1 pt QoQ; +6 pts YoY) mainly on
lower total revenues, as operating expenses remained on track,
reflecting effective cost control. Operating expenses increased 7%
YoY mainly from higher personnel expenses, most of which was
related to the CEO transition.
- Credit-impaired Loans, also referred to as Non-Performing Loans
or NPLs, remained unchanged QoQ at $61.8
million, now representing 1.16% of lower total Loan
Portfolio balances at the end of 1Q20. This compares to
$64.7 million, or 1.18% of total Loan
Portfolio, a year ago.
- The Bank's total allowance for credit losses remained
relatively stable at March 31, 2020
with respect to December 31, 2019
levels, representing 1.73% of the total Credit Portfolio, compared
to 1.56% a quarter ago. The increased coverage resulted from higher
provision requirements on revised outlook for certain industries
mostly impacted by Covid-19, partially offset by reversal in the
collectively assessed provision from lower EoP portfolio
balances.
CEO's Comments
Mr. Jorge Salas, Bladex's Chief
Executive Officer said:
"A couple of days after I joined the Bank on March 9, the World Health Organization declared
COVID-19 as a global pandemic and we at Bladex activated our
Business Continuity Plan on March 12.
Since then, our 177 employees have been working remotely and the
Bank's day-to-day operations in full scale have continued
uninterrupted, demonstrating the Bank's preparation and agility in
its operating structure.
In view of the magnitude of this crisis and the sudden and
profound impact on global markets, the Bank took rapid steps to
preserve liquidity, and was able to increase its cash position
because of its historically diversified and stable funding sources,
which include deposits from Latin American central banks, our Class
A shareholders, as well as long-standing relationships with
correspondent banks across the globe.
On the credit side, the Bank has maintained a high quality
portfolio with a country mix that, thanks to the strategies
implemented during the last several quarters, is weighted toward
lower risk countries, quasi-sovereign corporations and top-tier
banks across the Region that accounted for 55% of total exposure at
quarter-end. The short-term nature of our exposure, coupled with
our geographic diversification and the top quality of our clients,
gives us the ability to rearrange the portfolio, as we did
throughout 2019. With a focus on maintaining credit soundness
under strict and prudent underwriting standards, we are serving our
strategic customer base focusing on client segments and industries
that are better suited to face the challenges posed by the current
crisis.
Our results for the first quarter of 2020 show a
well-capitalized, highly liquid bank with a strong balance sheet,
industry leading efficiency metrics, sound asset quality with a
top-notch clientele, very low arrears and, perhaps most
importantly, the ability to be flexible. I am very grateful to lead
an organization that can quickly adapt to such extreme
circumstances, and I want to personally thank our employees and our
Board of Directors who have made this possible. Those of you
who know BLADEX, know that our strength and adaptability are built
in, and have been so for a long time.
Finally, I want to address our Board's decision on the dividend
declaration announced today. In view of the Bank's strong balance
sheet, together with our continued capacity to generate capital
through earnings, the Board decided to continue to distribute
dividends. However, now that capital preservation is an
over-arching priority, the Board reduced the first interim dividend
to 25 cents per share, which is a
payout of 54% on first quarter 2020 earnings. Because of the
volatile nature of the Latin American Region in which we operate,
the Bank has historically maintained solid levels of capitalization
which, in this context, becomes a unique strength, enabling us to
serve our clients' needs in difficult times like these."
RECENT EVENTS
- Quarterly dividend payment: The Bank's Board of
Directors (the "Board") approved a quarterly common dividend of
$0.25 per share corresponding to the
first quarter 2020. The cash dividend will be paid on
May 13, 2020, to shareholders
registered as of April 27, 2020.
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 ("NII") 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 "Credit Portfolio" includes gross loans (or the
"Loan Portfolio"), securities at FVOCI and at amortized cost, gross
of interest receivable and the allowance for expected credit
losses, loan commitments and financial guarantee contracts, such as
confirmed and stand-by letters of credit, and guarantees covering
commercial risk; and other assets consisting of customers'
liabilities under acceptances.
- 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 due from banks,
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.
- 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.
- Total allowance for losses refers to allowance for loan losses
plus allowance for loan commitments and financial guarantee
contract losses and allowance for investment securities
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 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements
can be identified by words such as: "anticipate", "intend", "plan",
"goal", "seek", "believe", "project", "estimate", "expect",
"strategy", "future", "likely", "may", "should", "will" and similar
references to future periods. The forward-looking statements
in this press release include the Bank's financial position, asset
quality and profitability, among others. 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
coronavirus (COVID-19) pandemic and government actions intended to
limit its spread; 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. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
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 Wednesday, April 15, 2020
at 11:00 a.m. New York City time (Eastern Time). For
those interested in participating, please dial 1-877-271-1828 in
the United States or, if outside
the United States,
1-334-323-9871. Participants should use conference passcode
44414285#, 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:
88179402.
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)