Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k)
May 05 2021 - 4:15PM
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: May 5, 2021
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FOREIGN
TRADE BANK OF LATIN AMERICA, INC.
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(Registrant)
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By: /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 FIRST QUARTER 2021 PROFIT OF $12.8 MILLION, OR $0.32 PER SHARE
PANAMA
CITY, REPUBLIC OF PANAMA, May 5, 2021
Banco Latinoamericano
de Comercio Exterior, S.A. (NYSE: BLX, “Bladex”, or “the Bank”), a Panama-based multinational bank originally
established by the central banks of 23 Latin-American and Caribbean countries to promote foreign trade and economic integration in the
Region, today announced its results for the First Quarter (“1Q21”) ended March 31, 2021.
The consolidated financial
information in this document has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as
issued by the International Accounting Standards Board (“IASB”).
FINANCIAL SNAPSHOT
(US$ million, except percentages
and per share
amounts)
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1Q21
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4Q20
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1Q20
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Key Income Statement
Highlights
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Net Interest Income ("NII")
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$
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18.9
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$
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22.3
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$
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25.8
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Fees and commissions, net
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$
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3.0
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$
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2.8
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$
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3.1
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Loss on financial instruments, net
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$
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(0.1
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$
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(0.1
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$
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(0.4
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Total revenues
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$
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22.0
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$
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25.3
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$
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28.8
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Reversal for credit losses
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$
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0.0
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$
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0.3
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$
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0.1
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Operating expenses
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$
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(9.1
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$
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(10.2
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$
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(10.5
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Profit for the period
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$
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12.8
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$
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15.7
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$
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18.3
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Profitability Ratios
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Earnings
per Share ("EPS") (1)
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$
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0.32
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$
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0.40
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$
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0.46
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Return
on Average Equity (“ROAE”) (2)
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5.0
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%
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6.1
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%
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7.2
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%
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Return on Average Assets (“ROAA”)
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0.8
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%
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1.0
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%
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1.1
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%
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Net
Interest Margin ("NIM") (3)
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1.24
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%
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1.37
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%
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1.59
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%
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Net
Interest Spread ("NIS") (4)
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1.04
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%
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1.17
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%
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1.16
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%
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Efficiency
Ratio (5)
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41.6
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%
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40.2
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%
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36.7
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%
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Assets, Capital, Liquidity
& Credit Quality
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Credit
Portfolio (6)
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$
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6,097
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$
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5,946
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$
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5,911
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Commercial
Portfolio (7)
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$
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5,708
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$
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5,551
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$
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5,832
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Investment Portfolio
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$
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389
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$
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395
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$
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79
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Total assets
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$
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6,375
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$
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6,289
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$
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6,823
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Total equity
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$
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1,037
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$
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1,038
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$
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1,018
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Market
capitalization (8)
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$
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601
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$
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628
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$
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408
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Tier
1 Capital to risk-weighted assets (Basel III – IRB) (9)
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26.3
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%
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26.0
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%
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21.8
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%
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Capital
Adequacy Ratio (Regulatory) (10)
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19.4
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%
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20.2
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%
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19.2
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%
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Total assets / Total equity (times)
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6.1
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6.1
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6.7
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Liquid
Assets / Total Assets (11)
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15.6
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%
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16.7
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%
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19.0
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%
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Credit-impaired
loans to Loan Portfolio (12)
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0.21
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%
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0.22
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%
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1.16
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%
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Total
allowance for losses to Credit Portfolio (13)
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0.73
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%
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0.75
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%
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1.73
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%
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Total
allowance for losses to credit-impaired loans (times) (13)
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4.2
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4.2
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1.7
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BUSINESS HIGHLIGHTS
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·
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Sequential
quarterly Commercial Portfolio growth continues the trend that started last year, up 3% QoQ to reach $5.7 billion, driven by higher loan
origination (+5% QoQ), with a continued focus on defensive sectors and stricter credit underwriting standards.
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During
1Q21, Bladex continues to collect virtually all loan maturities (close to 100% since the onset of Covid-19), evidencing the high quality
of the Bank’s borrower base and short-term nature of its business.
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As
of March 31, 2021, Bladex’s credit quality remains sound, with a well-diversified exposure across countries, having 57% of the
Commercial Portfolio in investment grade countries, 53% with financial institutions and 18% with sovereign and state-owned corporations.
As well, Bladex continues with the downsize of exposures to higher risk sectors since the onset of Covid-19, such as sugar (-46%) and
airlines (-67%), now representing 1% and 0.8% of the total portfolio, respectively.
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·
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As
of March 31, 2021, credit-impaired loans (“NPLs”) totaled $11 million, unchanged from the previous quarter, representing
0.2% of the total Loan Portfolio. Total allowance for expected credit losses remained stable with no credit provision charges during
the quarter.
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Bladex
maintained a sound and diversified funding structure in 1Q21, supported by the continued growth of its deposit base (+1 QoQ; +29% YoY).
In turn, the Bank’s liquidity position remained stable QoQ at $992 million (16% of Total Assets) as of March 31, 2021.
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Bladex’s
Profit for 1Q21 was $12.8 million (-19% QoQ, -30% YoY), mostly due to lower Net Interest Income (NII). The 15% QoQ decrease in NII was
mainly driven by lower net lending spreads, returning to pre-Covid levels at 150 bps, partially offset by Credit Portfolio growth and
lower liquidity levels. The 27% YoY decrease in NII was mainly impacted by lower Libor-based rates and average lending volumes, still
below pre-Covid balances.
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Fees
and commissions income totaled $3.0 million for 1Q21, relatively stable on absolute terms, on steady fees from the Bank’s letters
of credit business. Fees from loan syndication business have been impacted since the onset of the Covid-19 pandemic, but this transaction-based
business is starting to pick up, as evidenced by the recent execution of a $300 million loan transaction in April of 2021, where Bladex
acted as Joint Lead Arranger.
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Expenses
remain closely controlled, down 10% on a sequential quarter basis due to the usual seasonally lower levels of the first quarter of the
year. Year-on-year, expenses were down by 13%, mainly on lower personnel expenses related to decreased performance-based variable compensation
provision. Efficiency Ratio stood at 41.6%, on lower income generation.
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CEO’s Comments
Mr.
Jorge Salas, Bladex’s Chief Executive Officer said: “We entered 2021 with a sound credit portfolio with almost zero NPLs,
a robust funding structure and a comfortable liquidity position. This is our third consecutive quarter of growth without relaxing credit
underwriting standards. The level of our Commercial Portfolio as of March 2021 was close to that of a year ago, but still more than $800
million below the level of December 2019. On the other hand, despite the uncertainty generated by the delayed vaccination campaigns in
some of the countries in the Region, we are starting to see clear signals of recovery for the Region. Recently, the International Monetary
Fund revised its 2021 growth estimates for Latin America, from 3% to 4.6% and, what is even more relevant for Bladex, the growth estimates
for trade have also been revised upwards from 8.2% to 16.2%, mainly driven by higher volumes and higher commodity prices.”
Mr.
Salas added: “Bladex’s first quarter results do not yet reflect this recovery, but we are confident that this will happen
as the Region’s economies continue on this upward path. The Board’s decision to carry out a Stock Repurchase for up to $60
million, under an Open Market Program, is a testament to that conviction, while, at the same time, providing us with the financial flexibility
to respond to both opportunities and challenges in the Region. In addition, the Board maintained the quarterly dividend at $0.25 cents
per share, which also reflects Bladex’s financial strength and earnings quality.”
Mr.
Salas concluded: “A year later after I joined the Bank, we have an even cleaner balance sheet, an even more committed team and
the Board’s mandate to explore different avenues to grow the Bank and return more value to shareholders remains unchanged. Although
the Pandemic continues to pose significant challenges for the Region, we believe that the Bank has many opportunities to grow and to
increase its products and services offerings. Bladex is well-prepared to navigate 2021 and we look forward to reporting our progress
to you in future quarters.”
RECENT EVENTS
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Open
Market Repurchase Program of up to $60 million: The Bank’s Board of Directors (the “Board”) has authorized a repurchase
program of up to $60 million of the Bank’s common stock. The repurchase program is intended to comply with Rule 10b-18 promulgated
under the Securities Exchange Act of 1934, as amended (“Rule 10b-18”).
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§
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Quarterly
dividend payment: The Board approved a quarterly common dividend of $0.25 per share corresponding to the first quarter 2021. The
cash dividend will be paid on June 2, 2021, to shareholders registered as of May 17, 2021.
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§
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Annual
Shareholders’ Meeting Results: At the Annual Shareholders’ Meeting held on April 29, 2021, in Panama City, Panama, shareholders:
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Elected
Mr. Miguel Heras Castro as Director representing Class “E” shares of the Bank’s
common stock, and Mrs. Isela Costantini and Mrs. Alexandra M. Aguirre, as Directors representing
All Classes of shares of the Bank’s common stock.
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Approved
the Bank’s audited consolidated financial statements for the fiscal year ended December
31, 2020.
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Ratified
KPMG as the Bank’s independent registered public accounting firm for the fiscal year
ending December 31, 2021.
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Approved,
on an advisory basis, the compensation of the Bank’s executive officers.
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Ratings
updates: On April 14, 2021, S&P Global Ratings affirmed the Bank’s global-
and national-scale issuer credit ratings at “BBB/A-2” and “mxAAA”,
respectively. The outlook was revised to “Stable” from “Negative”
on sound asset quality metrics. According to S&P Global Ratings’ view, “Banco
Latinoamericano de Comercio Exterior S.A. (Bladex) was able to cope with the COVID-19 breakout
thanks to strong capitalization levels and solid risk management, which has enabled it to
maintain a healthy and diversified portfolio without erosion of its capital metrics. The
stable outlook reflects our expectation that Bladex will withstand the prolonged downside
risks from the pandemic thanks to sound capital metrics and manageable asset quality metrics,
while it maintains its most relevant credit exposures in countries with lower economic risks.”
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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.
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QoQ
and YoY refer to quarter-on-quarter and year-on-year variations, respectively.
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Footnotes:
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1)
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Earnings
per Share (“EPS”) calculation is based on the average number of shares outstanding
during each period.
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2)
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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 (“NII”)
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 “Credit Portfolio” includes gross loans at amortized cost (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.
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7)
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The
Bank’s “Commercial Portfolio” includes gross loans at amortized cost (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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8)
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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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9)
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Tier
1 Capital ratio is calculated according to Basel III capital adequacy guidelines, and as
a percentage of risk-weighted assets. Risk-weighted assets are estimated based on Basel III
capital adequacy guidelines, utilizing internal-ratings based approach or “IRB”
for credit risk and standardized approach for operational risk.
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10)
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As
defined by the Superintendency of Banks of Panama through Rules No. 01-2015 and 03-2016,
based on Basel III standardized approach. The capital adequacy ratio is defined as the ratio
of capital funds to risk-weighted assets, rated according to the asset’s categories
for credit risk. In addition, risk-weighted assets consider calculations for market risk
and operating risk.
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11)
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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; as well
as highly rated corporate debt securities (above ‘A-‘). Liquidity ratio refers
to liquid assets as a percentage of total assets.
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12)
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Loan
Portfolio refers to gross loans at amortized cost, excluding interest receivable, the allowance
for loan losses, and unearned interest and deferred fees. Credit-impaired loans are also
commonly referred to as Non-Performing Loans or NPLs.
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13)
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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.
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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 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, May 5, 2021 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 68251167, 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: 37768534.
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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