PANAMA CITY, Oct. 27, 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 third quarter ("3Q20") and nine
months ("9M20") ended September
30, 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)
|
9M20
|
9M19
|
3Q20
|
2Q20
|
3Q19
|
Key Income
Statement Highlights
|
|
|
|
|
|
Net Interest Income
("NII")
|
$70.1
|
$82.6
|
$22.6
|
$21.7
|
$26.7
|
Fees and commissions,
net
|
$7.6
|
$10.3
|
$2.6
|
$1.9
|
$2.8
|
(Loss) gain on
financial instruments, net
|
($4.7)
|
$0.7
|
($0.4)
|
($3.9)
|
($0.2)
|
Total
revenues
|
$73.8
|
$95.2
|
$25.2
|
$19.9
|
$29.5
|
Reversal (provision)
for credit losses
|
$1.2
|
($2.4)
|
($1.5)
|
$2.6
|
($0.6)
|
Operating
expenses
|
($27.2)
|
($29.4)
|
($8.3)
|
($8.3)
|
($9.0)
|
Profit for the
period
|
$47.9
|
$64.0
|
$15.4
|
$14.1
|
$20.4
|
Profitability
Ratios
|
|
|
|
|
|
Earnings per Share
("EPS") (1)
|
$1.21
|
$1.62
|
$0.39
|
$0.36
|
$0.52
|
Return on Average
Equity ("ROAE")(2)
|
6.2%
|
8.5%
|
6.0%
|
5.5%
|
8.0%
|
Return on Average
Assets ("ROAA")
|
0.96%
|
1.36%
|
0.95%
|
0.83%
|
1.34%
|
Net Interest Margin
("NIM")(3)
|
1.43%
|
1.77%
|
1.42%
|
1.28%
|
1.77%
|
Net Interest Spread
("NIS")(4)
|
1.12%
|
1.19%
|
1.19%
|
1.01%
|
1.19%
|
Efficiency
Ratio(5)
|
36.8%
|
30.9%
|
33.1%
|
41.5%
|
30.4%
|
Assets, Capital,
Liquidity &
Credit Quality
|
|
|
|
|
|
Credit
Portfolio(6)
|
$5,320
|
$6,302
|
$5,320
|
$5,011
|
$6,302
|
Commercial
Portfolio(7)
|
$5,087
|
$6,217
|
$5,087
|
$4,915
|
$6,217
|
Investment
Portfolio
|
$234
|
$85
|
$234
|
$96
|
$85
|
Total
assets
|
$6,311
|
$6,681
|
$6,311
|
$6,627
|
$6,681
|
Total
equity
|
$1,026
|
$1,009
|
$1,026
|
$1,022
|
$1,009
|
Market
capitalization(8)
|
$482
|
$790
|
$482
|
$456
|
$790
|
Tier 1 Basel III
Capital Ratio (9)
|
26.5%
|
21.1%
|
26.5%
|
24.8%
|
21.1%
|
Total assets / Total
equity (times)
|
6.2
|
6.6
|
6.2
|
6.5
|
6.6
|
Liquid Assets / Total
Assets (10)
|
23.2%
|
14.4%
|
23.2%
|
29.6%
|
14.4%
|
Credit-impaired loans
to Loan Portfolio(11)
|
0.00%
|
1.11%
|
0.00%
|
0.00%
|
1.11%
|
Total allowance for
losses to Credit Portfolio(12)
|
0.84%
|
1.66%
|
0.84%
|
0.95%
|
1.66%
|
Total allowance for
losses to credit-impaired loans (times)(12)
|
n.m.
|
1.7
|
n.m.
|
n.m.
|
1.7
|
"n.m." means not
meaningful.
|
|
|
|
|
|
BUSINESS HIGHLIGHTS
- Bladex's unique business model has unceasingly proven to be a
key advantage in the current context, allowing it to maintain a
sound asset quality and to swiftly re-balance its credit risk
towards defensive sectors. The Bank resumed portfolio growth during
the quarter and reports sustainable results and a solid financial
position, denoted by the $15.4
million Profit for the 3Q20 (+9% QoQ), with a capitalization
of 26.5% Tier 1 Basel III Capital Ratio.
- The Bank continued to collect almost all scheduled credit
maturities (close to 100% during the 3Q20 and since the onset of
Covid-19), evidencing the high quality of the Bank's borrower base
and short-term nature of its business.
- 3Q20 loan origination more than doubled from the previous
quarter (+120% QoQ), still under strict credit underwriting
standards, resulting in a 3% Commercial Portfolio growth, reaching
$5.1 billion as of September 30, 2020, at wider credit spreads (+14
bps over Libor vs the prior quarter), although the size of the
Commercial Portfolio is still below pre-Covid levels (-18% YoY).
Considering the increase in its investment securities portfolio,
the Bank's total Credit Portfolio increased 6% QoQ.
- Bladex's portfolio remained well-diversified and focused on
high quality exposures, with 59% in investment grade countries, 53%
with financial institutions and 14% with sovereign and state-owned
corporations. The Bank continued downsizing exposure to higher risk
sectors, such as the airline industry, which has been decreased by
$99 million or 67% since March 31, 2020, now representing less than 1% of
total portfolio.
- In line with Bladex's strategy to maintain a solid and
diversified funding base to support Commercial Portfolio growth,
the Bank successfully placed a 144A/RegS bond in the U.S. and
international capital markets, coupled with other medium-term
bilateral, syndicated and capital market transactions, while its
deposit base continued to grow. In turn, the Bank has gradually
reduced its liquidity position, mostly consisting of cash and due
from banks, which stood at $1.5
billion (23% of Total Assets) at the end of 3Q20, a still
robust level given the prevailing market uncertainty and deep
economic impact of Covid-19.
- Net Interest Income ("NII") and Margin ("NIM") experienced a
positive quarterly trend (+4% and +14 bps QoQ, respectively), on
the widening rate differential between loans and liabilities, but
still below pre-Covid levels (-15% YoY and -35 bps YoY,
respectively), mostly pressured by higher average cash position
levels (27% of average assets) and decreased average loan balances
(by design).
- Fees and commission income totaled $2.6
million for 3Q20, up 35% QoQ, mainly driven by higher fees
from the letters of credit business (+28% QoQ) which is now
performing at pre-Covid levels.
- Credit provision charges totaled $1.5
million in 3Q20, mainly on higher Credit Portfolio balances
and the continuous assessment of the impact of certain country risk
deteriorations on the Bank's exposure. Asset quality remained sound
with no new credit impaired transactions during the quarter,
resulting in zero non-performing loans as of September 30, 2020. As of the same date, the
Bank's total allowance for credit losses represented a coverage
ratio of 84 bps the total Credit Portfolio.
- Efficiency Ratio improved to 33% in 3Q20, due to higher total
revenues (+27% QoQ) with stable operating expenses (+1% QoQ). YTD
Operating expenses are still down $2.3
million, or 8%, YoY on lower personnel expenses, mostly due
to a reduced performance-based variable compensation
provision.
CEO's Comments
Mr. Jorge Salas, Bladex's Chief
Executive Officer said: "Our third quarter results are, once again,
a good reflection of our conservative approach and the resilience
of our business model. The strong credit quality of Bladex's
commercial portfolio, coupled with its short-term nature, resulted
in the timely collection of almost 100% of all loans at maturity.
Having said that, we remain prudently cautious in the face of the
great deal of uncertainty that still lies ahead in the months to
come.
Bladex resumed portfolio growth and, by working closely with its
clients, the Bank was able to disburse over $2.2 billion, more than twice the volume
disbursed in the previous quarter. This resulted in a $172 million growth, equivalent to a 3% increase
of its commercial portfolio to $5.1
billion, while maintaining sound asset quality and portfolio
diversification.
On the liability side, the Bank's deposit base increased by
$169 million, or 6%
quarter-on-quarter, with a relevant participation from our Class A
shareholders, that represented 51% of total deposits by the end of
September. During this last quarter, Bladex also successfully
placed a new global syndication and its third issuance in the
144A/RegS market for USD $400
million, which was four times oversubscribed. At the same
time, the Bank gradually reduced its liquidity position, mostly
consisting of cash and due from banks, which stood at $1.5 billion at the end of 3Q20, a still robust
level given the prevailing market uncertainty and deep economic
impact of Covid-19.
With a gradual but positive trend in its levels of
profitability, a strong capitalization, a resilient asset
portfolio, robust levels of liquidity and a solid funding base, the
Bank enjoys a strong financial position to face a challenging
credit cycle in the Region. I am very proud of the way our team has
come together to navigate the storm so far. There is no doubt that
opportunities will keep arising as the economies re-open throughout
the Region and Bladex will continue to support its clients during
this uncertain time."
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
third quarter 2020. The cash dividend will be paid on November 25, 2020, to shareholders registered as
of November 9, 2020.
- Bond issuance in the international capital market: On
September 9, 2020, Bladex announced
the successful issuance of its third bond in the 144A/Reg S market
for US$400 million. The five-year
term bonds pay a fixed rate coupon of 2.375%. This new bond, which
was oversubscribed more than four times, attracted investors from
the United States, Europe, Asia,
and Latin America.
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 "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.
7) 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.
8) Market
capitalization corresponds to total outstanding common shares
multiplied by market close price at the end of each corresponding
period.
9) 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.
10) 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; as well as highly rated corporate debt securities
(above 'A-'). Liquidity ratio refers to liquid assets as a
percentage of total assets.
11) 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.
12) 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 Tuesday, October 27, 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
89194804#, 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:
23850585.
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)