BLX - Earnings call transcript Q3 2024 | Banco Latinoamericano de Comercio Exterior, S. A.

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Operator

Good morning, ladies and gentlemen, and welcome to Bladex's Third Quarter 2024 Earnings Conference Call. A slide presentation is accompanying today's webcast and is also available on the Investors section of the company's website, www.bladex.com. [Operator Instructions] I would now like to turn the call over to Mr. Jorge Salas, Chief Executive Officer. Sir, please go ahead.

Jorge Salas

thank quarter joining results. and discuss today everyone, third our morning, you us for to Good I'll record-breaking quarter with for begin an Bladex. overview of another

questions. analysis the plan for remaining After Annie, our you that, for on that, our the of will of call provide update a Following that, our a progress strategic guidance CFO, I will year. financial also we'll quarter. the detailed results for the Right and open after the provide of revised

on X, Slide moving So summary slide. to the

the sheet, treasury their clear the compared of months billion has $X.X significant year-on-year of funding efforts our reached pleased On in see corporate reduce with last X% quarter-on-quarter portfolio for also the the nearly record XX remarkable This year. a balance commercial growth result billion, a allowed our client deposits scorecards. reached us growing first The growth and further but balanced growth for growth our base of deposit expanding and the resulting progress, spreads. We're to importantly, shift a more to Deposits commercial funding of is in new $X.X of XX% XX%. with time, very funding doubling source most in in representing potential a last we near of by mix coordinated KPIs the guided our cost-efficient deposit teams the in future. the

we most Total are for evolution for liquidity, would compared lower American last despite achieved the Syndication and fees up had Q-on-Q year. months, the decreased of X $X the year-on-year. countries, open same confident performance, quarter, the top that of the and pipeline deals P&L a side, in with in especially lending X% in to growth first we we The close also we markets due year interest this record increased On syndication competitive business of of Latin noninterest rates generating record feel credit the local figures like have, widely to track the record XX% letters fees. environment total quarters more to number debt highlight a but results. I capital also million have with last more period dollar to slightly names and XX% X are on the both fees income. once

in Regarding phase previous second the have forecasted calls, in costs plan. strategic expenses, of increased we as line investments our have required by our anticipated with this

which line compared XX.X%. of in the in which result, financial expectations, we is a have return results a our guidance efficiency last $XX quarter, to a of slightly with same equity been the XX% the and increase line providing the with million income record to period net in results As on in ratio for a year, for culminated XX%, rose strong year. These

this performance, the I year will Given the you for stronger-than-expected with opening questions. all for provide before guidance a revised call

hand Let financial Annie, me Annie, detailed over now it please our a CFO, go ahead. for to analysis.

Ana de Mendez

good everyone. Thank morning you, and Jorge, to

at than have with Jorge XXXX's graph, enhanced $XXX The growth can of an our profitability million, with of last tripled ROA $X.XX mentioned, X X% ROE reached X. period at net the trend an In same period bank solid more you last first of strategic year results X for Let's a sustained the now the for million, $XX has XXXX, share. Year-to-date, continues XX% from sustained has in of levels. our tripled quarter-on-quarter income by from the net growth see X.X%. When plan, this an than per ROE line strategy more the that level from executing has observed and up year-to-date compared above same third started the move as performance, of representing XX% levels its the over doubled. while quarter to year. months the we of quarters marking driving Slide top and be increase Quarterly since and ROA to income XXXX to by profitability annual a XX% inception

of off-balance coupled position New loans coverage go and by to by This billion sheet reached quarter. The for loan preceding now ratio. with letter mostly a loan into me our and the into York prudent commercial which Let from liquidity XX% $X.X of strong detail significant result assets portfolio, from $X asset more grow the in of last reached Bladex's as mark items, Fed deposits, starting X% was assets first the history, liquidity of up credit on Total growth continuing sheet last reflecting other year by was billion, includes and with growth aligned X. the balance detail, and represented XX% time billion, more over $X.X and a drivers profitability management A surpassing scale. of composition Slide year XX% placed with liquidity billion total X% up Basel's business the quarter-on-quarter. the XX% growth, from in $XX.X mainly

bank's denotes exposure of their markets strategic a tenor of our represent Brazil the eligible remaining activity seen #X, trade given LATAM. York the of approximately Mexico the country relatively allowing and placed Bladex, needed. mostly the the years. The to The XX% size country $X.X for X further economies credit the They average at such the if Federal contingent composition with our left-hand to portfolio providing and is as and relevance in an on the on the of has side, be New Colombia country duration is across securities discounted for the exposures exposure. at South is Reserve, short booked be in with XX% commercial portfolio non-LatAm funding investment-grade U.S., well-diversified of right can liquidity respectively, country Peru at are top with with billion therefore, the region. XX% Most As relevant other this among and to risk therefore exposures and along portfolio X%. diversification of agency total, issuers, mostly America, overall in Slide a portfolio amounting to from

and Central countries, XX% where Dominican short-term portfolio with each continue risk/reward growth American average solid XX% of tenor are representing opportunities, and end. in nature, in The We total we commercial within end. remaining fundamentals the also on an exposure both Caribbean our economic to remains months to with Guatemala, good execute quarter next focusing at certain of having particularly strategy Republic at mature scheduled quarter the year, XX

agile as as shown Bladex's items of Stage of quality, prior end, conditions has and off-balance risk in In X.X% are been loans preceding low year. in portfolio to about X Stage portfolio of the Only model allows X% classified us corporations of on we asset down strong high quarter jump every quarter quarters. that of more the short-term as close maturities matures is base This means Slide on as opportunities rotation industries from X new in to XX.X% portfolio portfolio, had that X, fact, arise. a as the Latin market of This than countries X. investment and as to and was and half be credit a a during quarter Stage banks classified react sheet and business they foundation with the Xx to able exposures the client American business of placed. defined across X. At quickly model top-tier profitable collected IFRS the or classified loans, including agile securities by was This

all Although with risk Stage are origination, increased credit X currently exposures represent since of performing. them

to Stage amounting impaired $XX million only minimal total classified credits or a a is NPLs Xx. of as Finally, exposure X X.X% reserve coverage of to total with close

loan mostly $X in for This partly the the Stage runoff deteriorated. were of has from third with from which offset X $X in Credit a Overall, and chain portfolio our off by pandemic charges mode a back. charged million, a provision represents coverage. isolated quarter, to several Stage reserves to the During sector, the relating remains reserve has oil Stage was since quarter years Colombian before been in third further recovery assessment in million supply classified recently gas quality the strong an exposure X, million individual which and the robust X. a loan $X.X

X. moving Slide Now to

to funding sources growth. well-diversified Our asset continue support strong

yet carries notable quarter-on-quarter. billion Deposits XX% funding. at strong now a end, reaching X% and of Our for account level growth on representing record annual at with quarter a $X.X deposit growth total trend, base another XX%

out operates presented through Slide comes central of shareholders, who quarters, continues capitalization sheet of from and showing total time. growth. came remaining part provide and enhanced banks the within A over U.S. strong last that at reserves agency, deposits strong total earnings both our Class program, target of levels with stable banks trend York end The the despite over been result bank's XX% to on our Yankee mostly funding from their international be a for XX% broker-dealers September place our has account client which remaining CD position balance and as by cross-selling to a equity our of generation, granularity. The source our a predominantly Our source New very distribution continues of several volume dollar deposits, growth positive X of XX% us corporations, efforts. a of

dividend, Board share financial the on performance. per $X.XX level consecutive the of recently quarterly at a back marking this declared third strong Our quarter

basis. by We generation well and a dividend on distribution to business as our as support growth as declared to continue expect quarterly decided earnings Board

last and and able sustain impacting quarters we we on optimization, is the continue spreads X% quarter reached evolution the P&L margin X.XX% line benefiting income up higher of to from from quarter interest a and interest assets stated up emphasize as loan Slide by of net X, on interest out, balances, coupled improving over of margin. Despite effect on X.X% the top increased to growth pricing XX% have X.XX%, interest by competitive X.XX% pointed $XX.X Year-to-date, environment, by net This the net reflects at credit with of explained our the levels. quarter. net spreads been by preceding average improved year income was Hence, you and spread for before interest-earning interest net and by Net as and NIM deposits. annually Jorge X% lending of mostly can see million from Moving levels positively the spread quarter-on-quarter, which target average third margins. market several the more mix performance respectively. and interest the for funding to net were

represents the year. $XX.X showcased in compared had the the last performance, solid This months first X reaching fee of million year. months to X million of for a increase bank the first quarter and for $XX.X XX, XX% Slide the a income As

credit fees for of close letter to continues million. quarter of $X business to well third the Our perform with

continued additions. streamlined processes of before, result been As the client in we have growth and the business has mentioned this

important the towards We of LC platform, to end fruits implementing be new should are currently this should our when to in the to stream. Structuring fee scale fees when quarter start transactions. second transactions syndication able after process further of quarter next year, to revenue two which five able bear $X.X and we million, stellar we closed close were during third the decreased a having

well case, see right our is the for a any as growth is for driver strong year a quarter-on-quarter with projections. as higher performance-based some this account XX% volumes base fluctuations. the we also our transaction-based from headcount client strategy. way. On solid As enhancing to on for on functions remaining XX, cost-to-income and expense expenses increased our compensation, in of transactions the foresee expenses product yet earnings above due supporting quarter But of target. and deployment salary the of stood growth year a for business last increased quarterly given provisions main XX%, on new in another through a though increased initial pipeline the at business, quarter third ratio we at year, by additions aimed The the Slide X% Personnel of higher even performance

back and call now leave you. Jorge. Thank to me for here Let it turn the

Jorge Salas

you, Annie. Thank

now me XXXX. of give you successive take step the started Let in picture and bigger our we a back phases executing strategic X-year on a that plan

objectives transitioning We've our have have optimization been leverage. preserving customer phase our expanded mentioned optimized from the achieved. phase plan. to We've Phase we the sheet balance are in X our previous base, of risk As profile. I calls, the expansion

We significantly deposits. increased have

surpassed our We and have anticipated. unlocking our value than have expectations, improved results strengthened we teams, have we initial more efficiencies. The operational had

our phase have ahead product second strategy. still of involves to trade treasury on the we some we phase of challenging to a support our focuses our finance as great business. work the most Phase While deal, our new business transition two our and X This lies platforms implementing of accomplished offering. expansion

digitalize our client target. our also upside. implementation our significant to power partner, believe platform interface, areas not will hold As solid business. I'm processing in solutions last the credit of state-of-the-art we on have CGI, with transactional quarter. letters we these pleased highlighted, working a progress that The report announced two add that capital making Project but substantial we're only trade to with is unit

have to XX% and up the half platform We the and the already close of second having of next anticipate completed year. running work, we in

bilateral syndicated hand, source that bank natural has a the will that offer capability and already our complement of such the platform and products provide treasury are On hedging Bladex credit, credit other FX able lines never the is to always relevant our noninterest letters enabled to clients income a local products facilities. capture. treasury to products the enhance unlock medium-term of derivative our to further to delivering, of of products that different currency as been These exposures. We believe us client base offering to the resulting lending,

an the business, Our gradually will provides as we that foster new a we this of development to to platform expect ample strong which client income. line of regional gain source leverage franchise of relevance

in We of our final initiative. process for are this the vendor stages selection now

of generation The see expect results X are the phase strategic upcoming release potential of joint our partnership reported income to numbers, levels. our the rate sensitive optimization to out quarters. This the Annie in additional maintained we've in roll less sum to as make implementation mentioned, regarding noninterest further that we yet Bladex's noninterest of the phase, coming the reinforcing So the have deliver profitability will in new sustainable last in is benefits press plan. gradually expand a that upside, up, and there's Phase further quarters means last consequence substantial reflected to which are of you these market and initial and key robust quarters we income, be the will capabilities this results particularly these fluctuations, not consolidate in trend as X the weeks. To the capabilities in growth additional essentially can the

anticipate to markets. as guidance given we now far grow our demand As commercial seeing in for increased we're the most XX% year, the close to portfolio

In XX% expect forecast XX%. initial deposits, terms our to also of exceed to of we

thus with a XX%, average from to of far, also performance now in our Given XX% estimate efficiency year. are efficiency, now ratio for expect growth initial end we We've the XX%. at we deposit significant made strides the our year an operational improvement aiming of approximately and notable

of result our trends, a revising guidance these As ROE XXXX positive we're upward.

the that even the look potential building future, for unlock going to demonstrates implementation years again, diversified to range XX% Our of forward to greater on This to forecast have enables of Thank maximizing new our will of projected is aimed growth essentially it initial and for of plan are established we we full times; at nature profitably model XX% the performance uniquely XX%, up sheet uncertain to from XX%. this open short-term and given high-quality call the upside far. I'm well-crafted resilience bank. Once plan navigate unique two, a a matched strategic the of we the the the strong disciplined potential as X the creation, the almost a things: that and business foundation loan book and you. the one, questions. two of to here management please now for value operator leave balance ask thus execution to confident strategic flexible

Operator

Instructions] BTG. [Operator Ricardo comes Buchpiguel Our from with first question

Ricardo Buchpiguel

I here on my have two side.

DCM, So little more saw see U.S. in in bit in spread So bit election least I if a loans, are in that higher see spreads question, the country in a commercial to to my you want more we if for due and country indeed spreads are approaching. Brazil loans the activity in -- of seeing meanwhile, lower understand have came Brazil, right? the the right? higher compression the we in So this that compressed the a I region? And we meanwhile, first, in specifically expect second we that deceleration spreads portfolio part from at should are

a of your also, to significant when was could was portfolio? trade was impact? do election want volumes how impacted commercial there and I negatively therefore, how believe And Trump So he LATAM on, in you in XXXX, any elected the potential thoughts hear if impact Bladex

Jorge Salas

the Ricardo, exposures second few with a to I'm in to first, in upcoming going elections Samuel, better days. U.S. the then Brazil. Officer, to margins our question start our I'm Chief will going it Brazilian on the explain And that Commercial and pass

Republic Guatemala, especially particularly flows, and for of flows, of GDP effects there or GDP. countries overall exposure countries One inflation I as elections have effects, say, are predict. have you trade economic primarily close to short-term in where American effects, of you thing flows, represent Mexico, the that, U.S. interest I for everyone. We're countries. course, where it the to in and region Central effects XX% have may and for you in -- Mexico, hard close to we you of the very the for we are you is relevant relevant for is remittances that indirect, are particularly XX% may The long-term you in and country rates, different First the the overall example, three partners, exposures have mean said is which American region. Yes. have mentioned, have relevant have of direct, the and have trade country, remittances resulting where or have remittances relevant Also, monitoring the for to a on clear see remittances South you like impacts. the relevant the of depending dynamic reality. Having X.X% we Dominican presidential

supply all tensions in and long-term, move flows, to place trend feel nearshoring know, case, said we also or as Central disruptions the countries mind nature not the and trade additional global the do that the also want to the the some China. of in having potentially for that, Samuel, sure, more the that that. suppliers will, potential volatility could sure that arise short-term the potentially to Mexico allow companies I the so any Keeping advantage we resilient take in looking given U.S. In navigate on us confident you accelerate don't to. will the On for American business other model chains that are ongoing will of closer opportunities with vigilant for take

Samuel Canineu

the for Brazil, thanks Brazil, side, spreads. On is international that competition, pressure are LATAM, Yes. competitive Ricardo. more on from obviously Brazil the DCM particularly and are market right, seeing the you we question, most And probably is we of one compete. that the putting

other hand, Brazil in still, the underrepresented say, potential. our quite is its I given portfolio would On

or Our Brazil been the growth now we our product for more rolling suited has fact Brazil are how have in -- we strategy, better with sophisticated offering new we've to out clients are. more as for that we've been Brazilian do -- or a

So that, we some is on and basically driving share capturing are that our growth.

with do to market necessarily GDP in because, that the again, in to the not growth product finance to new onboard we And our with did have our past, trade as correlated well able the out new low right we be strategy, clients structured conditions onboard. as everything are roll Brazil the as not we're side. particularly -- we the So the on strategy, will

Operator

with next Capital. question Daniel Our from Credicorp comes Mora

Daniel Mora

a have couple of questions. I also

margins. regarding is one first The

XXXX. like the think of understand observe NIM And and how in can sensitivity you Fed? And second are profitability I to not interest do the phase the the also results think what should this and We quarters, will effect first now of my And we what and have the interest interest recent a at can have considering current like given in the initially to going rate last we we seeing net you percentage But understand that given ROE on with the the rates? right be I expect That of be income, considering income interest only effect of what can that guidance the of are target to analysis that normalization that from effect the normally income expect question. And we ROE. a expansion NIM we forward we deployment of present the observe margins we would interest can will decreases now? rates the of total performance, the a under net or the in coming in because to what are above what between fact one new we what the XX% given be compared will is, initiatives in now, if represent right the is that seeing decreases XX% two would this positive can volume we very currently for the that of of higher given couple strong And current seen increase but years. XX% the a rates.

Jorge Salas

on CFO, the rate going question. to? second tackle I'll interest sensitivity, let that, I'm then to speak to our Daniel, want and Annie, you Annie,

Ana de Mendez

Thank Yes. Okay. you.

yes, So in are interest that several occasions dollar mentioned market we and -- rates. U.S. right, sensitive we you're to market have

basically about a talk basis interest points interest of every on sheet. and That's translates well. floating interest sides because interest the like could is a to to impact margin all sensitivity, ROE rates rates and net our points both points XX-basis have into the we margin net like in as our book have -- that XXX-basis XXX sensitivity movement balance So in

liabilities spreads continue. also leave address, to should but both noninterest Sam new our do transactions I'll Jorge and of -- the able and deployment -- and be what through we end, now related, to although structured similarly, your at and that for in going that is assets the pretty that an are short-term very lending place, But invested much we asset it impact. we margin mentioned by it our profitability. that the that to it And is do that relates the and that have to the Jorge strategy we question have trade forward so second in then is And overall definitely positions. And enhance diminishes has anticipate equity, some reprice the see sustain going yield and products, the

Jorge Salas

expect platforms noninterest our represents to our right, XX% and Annie. today. exactly geared by of XXXX. up we Currently, to exactly That's that's income as target about generate to Yes, of The the XX% this climb revenues total are noninterest income. gradually additional end of

Operator

comes Miruna Our from Jefferies. next Chirea with question

Miruna Chirea

I you growing a X% can that your are this margins I see please. very just had loans quarter what loan growth, quick well. on looks on like as one good

was longer-term two wondering, see you growth And do I growth how the next and think capital So where you opportunity about this the do over years? management?

Jorge Salas

Republic. Yes. Well, fourth exposure steady loan bit Mexico largest growth, Dominican growth estimates. They mean, Dominican by initial slower some are the hard new ranked for growth, product Brazil. sure, of relatively say, country Do in something, Brazil has the the dynamics. size the project as obviously, say has along the There the been also also given been overall growth supported our year. and to much would already for Republic, will like stronger be short-term been XXXX. a portfolio Dominican way Republic created new next in than surpassed or that Guatemala said, Guatemala, fifth Brazil, it's the nature by countries infrastructure that we with our Sam and fueled, today diversification, part with, driven year, think even Sam growth increased now are has and some and have the talked sector, the initially like about But are portfolio to in noteworthy. countries want are or energy very expected it's with Guatemala of the Sam? through this rollouts Republic little investments the our represents Dominican country's exposures you particular, about our correlated in recently add to is underrepresented sense, about by robust XX%. In and I which finance XXXX, unit, and strategy. That's economy. overrepresented what portfolio. of the I Mexico, that like

Samuel Canineu

part as the of -- favor quantity. new quality we think strategy, I we versus

And to profitably, believe is there the the We've capital And we -- room base. price is are plan. we there -- use as We're markets pricing opening discipline strategy, that. there also see capital experiencing focus, continue will is initial we established opportunities continue the grow our our to to will to will So to still we we phase that as us. grow If new but we continue. have efficiently. we of is grow since discipline. new always yet will we maintaining out That which strive for the rolling the see we been our

Operator

Our next question comes ]. William from Hayes [

Unknown Analyst

Congratulations the on is marketplace. it's suggest would really that results. to moved the haven't of conservative both payout superb ratio note a interesting And that But quite in comparisons. some in needle I peer your XX% and these results historical

dividends? Given not capital especially and but does require your which expectations through income do noninterest earnings actual only growth, your really you allocations, earnings increase when on not focus intend to your of payout

Jorge Salas

I'll job, upside making you shareholder Bladex, is that policy, the -- an discussion, the discussion attractive the the ongoing want total decision say, of and and complement. to Good revolves an I also tackle the as let it's and management, capital ongoing it's broader quarterly that's our well dividend known, enough. Annie I In stock else? that? case dividend price Board there, the don't know, But Annie, would question. but it's Annie, to complement is if yield you anything mean ongoing takes. do that around And a discussion. I sure you value the want

Ana de Mendez

it's on, looking mentioned at profitable always Yes, a discussion. us Jorge, -- Sam opportunities. about right just always

well returning ROE. XX% performing growth we very now, are capital. balance it's So and between Right at a

discussion case, an the And basis. quarterly ongoing being that and at the Board that's is dividend the think good. level so And level, that current we it's the pretty a on Board's decision

we what that's So think I about can say that.

Operator

very have for today. remarks. for That's you back I'll to we Okay. questions pass the Jorge the Thank line concluding all much. Salas the

Jorge Salas

you, Thank Sophia.

their two recently have coverage welcome we I coverage these initiated warm to the with respected testament, universe teams the renewed growing a Credit that, and Corp joining. Before Bladex, Bladex. and is much call feel, The very we to on appreciate Latin insights investment who to we'll leave Pactual. in interest valuable to in analysts and providing you thank the world. With We across to community would a America of of commitment their and our our conclude, prominent extend institutions forward just engaging sell-side the there, like BTG for inclusion look

Operator

conclude today's call. does This conference

have nice and disconnect, may a day. You

Banco Latinoamericano de Comercio Exterior, S. A. (BLX) 30 Oct 242024 Q3 Earnings call transcript