BLX - Earnings call transcript Q4 2021 | Banco Latinoamericano de Comercio Exterior, S. A.

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Operator

Hello, everyone, and welcome to Bladex’s Fourth Quarter 2021 Conference Call on this 22nd day of February 2022. This call is being recorded and is for investors and analysts only.

If you are a member of the media you are invited to listen only. Bladex has prepared a PowerPoint presentation to accompany their discussion. It is available through the webcast and on the Banc’s corporate website at www.bladex.com.

Mr. are today us Joining Jorge Salas, and Executive Officer; Mrs. Chief Financial Graciela de Chief Méndez, Ana Officer. be earnings corporate on issued comments based Their will the and available earlier is release, on the website. today was which made pursuant in and of described Securities Section The following of Private statement to Safe Securities forward-looking the of Harbor Act Reform XXXX. the the Litigation XXE statements for XXXX Act is Exchange trends will such results, we communications, make the anticipated as plans regarding these that condition. forward-looking, certain its In are affecting future statements Bladex’s and financial results in markets statements and day statements the call, forward-looking are undertake based These Bladex’s does knowledge. expectations events Bladex broadcast conference to on the this subsequent these expectations on of of update not initial and or the the filings Banc’s press Various uncertainties risks, releases Securities Exchange in with Commission. and assumptions detailed and and are communications. or results more Should any differ our underlying one or results or prove these expressed significantly implied of of may materialize should actual these incorrect, assumptions from or uncertainties risks in to over And I’m the to with pleased Mr. that, turn call Salas presentation. for his

Jorge Salas

Thank here results fourth let’s Ana X. today we a straight executive discuss you, Today, other Officer year Commercial and members with everyone. Please, Canineu few Sam team. I’m morning our Chief CFO; of Méndez, will our for the slide and XXXX. quarter end good Chelsea go and to

basis consecutive XX% that’s simply costs last increased Credit XX% six continues QX, year-on-year. In while spreads quarter-on-quarter, Profits portfolio also the X and for quarter up stable. best was were quarter grow the So from year-on-year. XX% put, grew previous quarters. remain X% funding XXXX. for by Banc commercial since to quarter, portfolio Lending points now

whether comment operating basically this dividends than completed is our last going and surprises it higher XX% the letters indications this later positive and in that program real under environment. will quality the by there no was and in exactly driven remains this current while be what credit of later year. too, trend Annie behind is, presentation. loan forward We’ll of in credit. control. income that the on the previous on and course, stock But is repurchase was fee quarters, All addressing expenses question Our sustainable

Moving a insights on $X.X and In the that our show quarter, quarter. disbursement we fast quarter billion Last QX, In able graph disperse turnover quarterly illustrates this portfolio of that the book usual more we slide biggest was the waterfall of X. during one to that’s second were of not XX% single in since than slide, than billion more are we this maturing captured important our credits couple the the to this of $X.X There are in quarter in XXXX. quarter. had graph.

$X.X is Bladex’s commodity in almost its trade business very so billion million at vendor First, finance $X sector, of basically our the short-term finance to best. generated those financing core

institution points Second, portfolio. our impact oil this spreads financial growth and in two financing, in medium portfolio despite XX the of region Most X we resilient years in X, and approximately reasons short-term and originated One, this there new of institutions and deals In in on of on growth two, investment financial quarter with average are term we main and short-term. slide sectors. wealth Most No In our margins with sector. countries $XXX three by million for of in Colombia changes show of terms is why of slide gas in here. over X, both the average. of breakdown we was our illustrate Peru, significant increased disbursement. life basis relative the by the basis high points increased sectors the

two previous quarter by million, compared $XX grew the a to last modest During amount of investment portfolio the the XXXX, Banc’s quarters.

our to robust loan the team these by a As complement trend but of assets in performance investments of gradual Banc more purchases led for of the portfolio, as anticipation rate decided liabilities bond view and to more the since In new the adopt slide the here, we conceived commercial and pace are the X, perhaps Sam of evolution XXXX. importantly, XXXX. expected quarter, hikes see both for a

pre-pandemic the almost On has rates, the and left grown also trends Today, XX%. interest we since higher in growth credit on portfolio commercial interest asset assets saw side are the XXX that investment the XXXX. portfolio levels consistent than by both earning maturity

above is the deposit last right, remained we the we In behavior a the month of evolution which billion. of funding illustrate the QX, date seasonal Banc’s This of year. a Bladex’s structure. On reduction the $X nevertheless saw of slight typical

As a fund the growth volumes earlier of already has this in repost of making seen have bilateral matter private its deposit and placements of more Banc The intensive investment EMCN the through to the portfolio. a rebound loans, portfolio year. use program, and fact, loan been we both

completed reinforce successfully was we new similar placement the oversubscribed also a Mexican base the a funding billion ago further approximately which That’s market to X order million in in $XXX late oversubscribed amount by January. and this, follow in of to Banc’s reopening addition a for Mexican few pesos. considerably debt weeks in In November, a

which to Banc March. we the has launched global Finally, close also expect a loan, syndicated early

the it funding is Latin through to I closing the environment, while also and tackle to comments will to rates relates how resilient P&L. it related Annie? well resources, to make maintaining and prepared Bladex funding current some particularly you as its it to America. our she Afterwards, now going positioned in to for news in walk growth, Bladex I’m U.S. raising these a can asset and base. cost here leave Annie With turn efficient so keep is

Ana Graciela de Méndez

line by quarter profit trend I’m coupled quarter top and were with expenses. with over $XX income results, morning, of these fee structuring bond loan in XX% by to operating the year-on-year comment strong more up complemented on medium trade quarter-on-quarter up up and NII XX% slide Fee reflecting than the this and a transactions X. stable lending consolidating recorded prices. supported up higher Thank strong on during starting XX% by business ongoing fourth its after quarterly back demand and commodity fourth activity was income spreads of pandemic a market was everyone. Bladex’s build quarter Jorge portfolio XXXX year you, balances portfolio happy during its syndications the quarterly XXXX XXXX two Jorge. the a growth of solid XX% Driving XX% basis and the Banc business following mentioned, back letters Good with sequential credit quarter, continued in closing generating reactivation and performance on a relatively year-on-year, as quarter up activity pickup as The on volumes on credit on just a segment. quarterly of on growth number the lending of transaction the good and of origination doubling no increased or quarter-on-quarter million. net results based NII in revenues, and in for a its higher a loan interest positive practically year-on-year both reaching and term

million effects its below pre-pandemic mostly are X% of there and levels average The for and increase and below in on the impacting XXXX. from $XX.X evolution. than evolution see on deployment. in annual market annual trade increased fees to These lower year was on income annual as down On finance lower driving enhancing to the has well account the $XX rate the a still XXXX XXXX exceeded slide more profits XXXX, levels, X% been by combined to close the XX, pre-pandemic of XXXX, increasing return still trailing by mainly slide lower we year-on-year $X X% focus expenses Fee or up in detail. levels, year-on-year. for its elements products net while increases Banc’s compensated down The year-on-year resulted surely but of business interest income related main result slightly of on XX% more is detail credit NII XX%. year letters the Moving although million profit of X. NII factor by annual an X% fee in the balances levels hardly revenues as can slightly million capabilities income, having higher before recorded see to and We

top net most As effect relevant combined liquidity million with yielding effect resulted in XXXX. in increased have the of both the year-on-year. balances in levels in volume compared loan assets Fed close at close it a negatively NII productive Lower $XX left, the the by reduced and invested when average low mostly had of presented graph positive coupled affecting rates, evolution, $XX with market the to to cash portfolios investment impact million however, to the

a year liabilities graph rate, on points bottom To bar the rates. was over have $X in NII level. So come series million XXXX basis to from this in XXXX loan when the base to by down labor at that close by compared financial Both market and XXX annual down average the illustrate the left, represent price overall, before.

loans faster both market During liabilities re-pricing XXXX XXXX completed low liabilities prevailing but rates. and financial loans in the re-price than at

We loans during rate graph, them series illustrating of same financial differential in for also in the XXXX. between level that then present and XXXX the same reached both early the has rates liabilities line the

reason graph and X.XX% in XXXX. the interest XXXX This XXXX, year a why rates the has increase in lending net with peak main X.XX% of interest bottom down So an is as of compared XXXX normalized during net assets come to income the depicts with to the is rate. X.XX% in to earning spread average that market in main margin respect after pandemic difference the terms representing total at shown to XXXX, net in the lower

with impact in sheet at spreads and short one earning tenor other compared financial assets in assets that rate assets for in the has the in majority invested have once average the of the the On XXXX, finalized. fact oX.XX% Banc’s X.XX% net in and stable and between balance sides the yield place rate in interest to X.XX% of equity market effect only of XXXX XXXX. liabilities the productive liabilities re-pricing differential the variations a in re-priced The stood is both full very hand, relatively

the to mostly in amounted Moving NPL portfolio. losses losses year on slide quality million in Provisions high growth exposure the total the portfolio for credit investment quarter continues to and quality and credit with exposure $X.X Banc’s and the performing allowances XX, credit credit of commercial XXXX of the its a to for well. during and quality reflect the related Banc asset to million during remaining reflect sound also asset in $X.X to X% for close evolution

by origination stage sort These credit as a XX% one time, X% low is calculated exposures the from Banc been were to of year XXXX level of time. risk to remaining XXXX, stages the downgraded stage since exposures the have During XXXX to year reduced the relate two The pandemic accounting two total countries classified Banc with they onset with These categorized loans pandemic. credit consistently the expected over X% or as losses ago. its credit as increased effects in the the lifetime in mostly out exposure down at for of high at total at representing reduced as and year and a to IFRS-X risk end credit one in of able sectors for credits of provisions opposed risk three.

history internal present levels Tier IRB management. strong loss end Banc’s several the capital solid well X year XX.X%. we respect aspects capitalization and XX, slide III Banc’s Also advanced on approach At to earnings. of calculation. credit which through Panama’s or preceding with stable above metrics at remained for of considering regulators ratings risk Basel the capital XX.X% credit quarters, the base under the XXXX, the a Basel’s and considers $X.XX approach regulatory share, assets per quarterly capital The from of ratio representing XX% quarterly calculated of to the Board X% declared recently banking minimum and weighted adequacy standardized dividend Finally,

prices, X.X resulting through total In since shares for stock E of mid at program price a share, addition Bladex million per completed a repurchased was of $XX common rules XXXX. market average volume NBA on program end, weighted $XX.XX in year total repurchase lounged prevailing which in SEC team, of Class May were million its towards the open market a the

float at stock date, convertibility the of in banks which or turn at to Class their E let XX% no shares have remaining at with completion At you owned American Latin discount. and for the end shares Jorge. total right of much. me E public X% Exchange A New accounted XX% Stock same common representing the very and common institutions call own York listed held Thank outstanding designee from total So December central XX% after Class Banc’s in by With financial B XX, XXXX. now the Class the year down of shares XXXX, to shares the the the by program, back stock Class this,

Jorge Salas

good Thank you Annie. Very job. clear,

Let the me just the on effects current macroeconomic Banc. our couple and on a scenario thoughts share of and

in to As foreign the effort is the rates as interest that prompted currency inflation, to trend the region March. in the in for Fed in expected for manage across higher rates. XXXX. has signaled Bladex returned short-term have of ahead This raising trade. XXXX, slowdown X% have provides This XXXX and The Latin shareholders way to have in systems the very which exactly levels. America Latin recent effects trade in increases economy Brazil economies well has led you monetary tightening financial them time an X.X% financing, in significant of soon as the from support last in the sharp emerging IMF active tighter surprisingly, March for that This currency forecasts destabilized across of of in is and is Back followed. involved region swiftly are fight by decisively XXXX. in from the we all currency. capital to corporate has bank’s acted demand to devaluations good that banks IMF, news and cycle are contain most pre-pandemic the down America at local strong is term around in avoid stable, aggressive XXXX sub from know, for part, are The what least outflows that in could have also the currencies rates rates increase their mid truth that policy as saw Central the X.X% Bladex we most back. hard XXXX see What economies today is despite already the The local others grow devaluations raise in Bladex. America. to a inevitable in generated in flows, is X% an especially region. and financing, inflation Fed Not and of consistently Latin traction game. and supervised however, to

to challenge. for it navigate its cautiously questions. and the this decades. context, And able be So we this we in that remain we Bladex all all, as new optimistic sort of last the willing support clients now will region it up done We’ll four In open able there. is for everybody. have to leave Thank you, will

Operator

phone? believe Instructions] [Operator with Jim, your is your Research. be muted. from Jim, you first you. you’re on I un-mute Singular muted. Thank Please may if open. line Are question comes that muted Alright, line Our your Jim Marrone

Jim Marrone

Yes. Can you hear me?

Operator

Yes, sir.

Ana Graciela de Méndez

morning. Hello. Good Jim. Yes,

Jim Marrone

you. Thank Yes.

So my first question to regards is net interest in the margin.

the you stabilized idea with it at business? that what and impact said how will anticipate an give rates You X.XX%? us higher in XXXX you Can

Jorge Salas

Annie? course. Sure Of

Ana Graciela de Méndez

interest And net the was what net a Well, capital XXXX slight is that’s the start difference interest two. to up. There’s of of the XXX. and rates margin. between if the would anticipate reverse spread come interest margin in in net happened the the Actually Yes. effect we interest XXXX XXX. The

more let’s terms, re-price say, is As the over liability that rate. within tenor both, frequency the fairly short at interest re-priced level, the six assets the or very liquidity mostly I tend And may of estimate based sensitive, magnitude may at time. say our about end in I a short increases run we the depend tenor. XX% fairly month, the do general will I overall mentioned liabilities on the market next, it They’re And depending of rate our in in we on because an increases be first but on end, re-price both neutral the mean, a quickly at the that and be to very they the impact would and months. same

when of our a as I answers is that positive that the of it’s equity clear and your enough margins over net to if yield of up So know the time and is net finalized benefit bottom portion assets when question. should interest interest re-pricing if are go increasing effect financing line. that the assets is and rates the effect this because don’t

Operator

I disconnected as am showing answer. were your right up that Jim you just finishing

we him IOWPB current further reconnect, All wait stock right, further moment. All we while open the right. in So Banc showing right this repurchases a to do for to webcast. further time for have will Is I questions All any re-prompt [Operator given queue. question Instructions] One values? the from the speakers questions. at I’m no

Ana Graciela de Méndez

at take of the we consistently actively that. managing solid can type did board capital the and of capitalization in this, initiatives the is the repurchase Having the initiatives Banc for very we considering given a which I in prospects program. the keeps its said terms The depending day, a Yes, on of last the growth management and on also with year region Banc and and capital stock capital operate future through position bank. board of decides this directors like end

it’s management really want revised I It’s if at the our board is to are What on capital to in Jorge you to. can board. and not level So speculate the place constantly up initiatives say its that.

Jorge Salas

tightening to the superintendency and in here local ratio expected to growth I we’re again, decision mean the up is well capitalized. bank the capital we’re but the have growth calculations and with market under yes, of recent still and ratios Panama been average closer board. But the very

Operator

[Operator further speakers are there queue. no time, this you. thank at Alright, questions in Alright, Instructions]

Jorge Salas

you Okay. safe. for Then stay your attention very and much thank

Ana Graciela de Méndez

Thank you.

Sam Canineu

Thank you.

Operator

may you rest participation of now concludes Thank and please your gentlemen. day. line. today’s you your your Thank you, disconnect the for And and phone enjoy teleconference. ladies This

Banco Latinoamericano de Comercio Exterior, S. A. (BLX) 22 Feb 222021 Q4 Earnings call transcript