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Banco Latinoamericano De Comercio Exterior (BLX)

Participants
Jorge Salas Chief Executive Officer
Ana Graciela de Méndez Chief Financial Officer
Sam Canineu Chief Commercial Officer
Jim Marrone Singular Research
Call transcript
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Operator

Hello, everyone, and welcome to Bladex's Third Quarter 2021 Conference call on this the 29th day of October 2021. 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 bank's corporate website at www.bladex.com.

Mr. are today us Joining Jorge Salas, and Executive Officer; Miss. 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 bank'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 us quarter to a team. you, members Annie, with of discuss everyone, CFO few our joining morning I'm here third my results. our executive And good Stephanie. and

are tightening reversals Remittances There demand pent Honduras, policy the external At support XXXX, region. and monetary some work opposite foresees fiscal High and prices, region, the high Dominican commodity All keep that record lost and grow respectively of real more the the keep and an countries. Latin Bladex. for the From financial cautiously several we to our year. broadly with downside on is robust countries is variance optimistic overview shadows like GDP COVID-XX recovery X% next followed The by Caribbean. The rate mixed Brazil, remain potential just this high in X.X, me IMF, up quarter Before the and arising of the growing advantage presidential but of same potential and Latin a them, two the direction. certain performance, to elections third growing favorable to of America are context. in XX positioned with time, Salvador taking Having a overall the across in no and underway But of global some give the very region quarters, of said months. the and that Bladex part in there year growth. conditions. a X.X% in was biggest deadlier is looms, heavy as Mexico, more Brazil be election at XXXX. According of that year, and quarterly the in economies X.X and recovery the discussing the conditions, Guatemala, need perspective, out well doubt Chile, in America, transmissible let El emergence scheduled that and pandemic with of recovery just also a still remain the one again second this region unrest provide Colombia, There level momentum on Republic. rose as risks the social is projected in mentioned. all, casts to moderate in to Rica Costa cases COVID-XX in economic for opportunities first

header quarter quarterly quality. asset Now growth with share earnings, summarized of in highlights. slide, credit They’re our third and on Slide trend let X, the positive well this me in impeccable

from higher business our continuing of income X% and that for our having with XX% quarter, growth grew credit the quarterly last portfolio. Increased and we're both trend record profits higher coming positive and from year, rate and prior fee to interest a credit is our year. relate profits both business revenues syndication improvements, income portfolio from the Our our to respect up investment letters

continues to remains pristine maintain plan again the this NPLs dividend executed announced board decided $X.XX the close market quarterly zero with May finally, quarter. last share once of for per program the planned. the control. be in quality share open buyback expenses remain under Asset to and Also, as to And

is Moving waterfall for net close show, on X% to graph quarter-on-quarter. scheduled billion $X.X strong Slide of up X. a from we to We disbursements collected an X.X already of growth portfolio This of solid a typical that billion quarter. X% maturities prior

of spread quarter mature an inflection abundance XXX are up loans the set to of financial two the which During the quarter. sectors term one the Higher since explain of by financial during to slight medium average This downward as the typically main points given pressure above institutions XX in dispersed in disbursements syndication point are this it spreads quarter then million of now basis the were increase secondly, in year, And regions the our experience on spreads the in factors spreads, the but the reduction beginning business. year. some reactivation recent the particularly is lower loan the in liquidity reverts general. which of short-term to quarterly lending carry related for

the Now mainly be and in diversified XX% industry. and metal during moving prices. commodities. on trade total increased trade volume We and flows accounting quarterly to prices, the we focused and Slide now well investment closely exposure. quarter in grade quarterly in now to Slide country X, Mexico of with the sectors growth increasing graph exposure for our portfolio see manufacturing tied We mostly and show by countries continues to to growth X, presented oil increased particularly same gas On tied by Uruguay

was in LATAM, trade grow I mentioned in XX% perform financial XX% almost XXXX. XXXX, are down energy gas metal the Other and flows sectors terms and well grade expected before, investment agribusiness countries. exposure institutions In and to mainly and of Colombia. in general, as capture And were with absolute positive such as generation. continue trends coffee to oil in Brazil growth So sectors most manufacturing, mainly in and to X%, continue to

a call, our it $XXX credit build an of companies. than and plus XX% a to rating Moving on Cash we double QX. investment investment last to average has This Latin invested with known This a of portfolio grade issuers. portfolio. continue are more duration mentioned, B as to with portfolio. to American the during million Insurance, by Slide of million portfolio XXX accrual during of the X, as portfolio increased double, is quarter’s the complement I the US quarter mostly years. totaling revenues yield the with from is to Bladex well intended almost mostly X.X of maturity, is as main XX% loan and obtaining by be kept of remaining XX% objective portfolio

is portfolio, stable to investment in liquid qualify III assets portfolio XXX% assets quality this issuers invested enhance addition, designed liquid relatively according which In yields. is high we quality definitions complement a grade that liquidity Basel high with to and as

Moving our X, to right. on on distribution the assets left Slide the on our and mix liability

positive pandemic side slide, book reaching at billion continue how both see now X worth the than mentioning portfolios growth It a quarterly of the surpassing consecutive levels. to left can close of and five $X the billion investment more of loan a combined that assets total with have you the On trend quarter end. is growth, quarters

and the program that with A Yankee right, region. the with the side million. success deposits totals shareholders institutional the Together of On participation now $XXX clients remain you the CD see our important from throughout total, of on XX% funding Class our

through to plenty ample Annie, P&L bilateral of world. markets, banks for access have our continue an and the ample global lines I us available around With to capital correspondent now will turn from walk We and who the on this quarter. with Annie? interbank base the to will call

Ana Graciela de Méndez

Thank you, to morning Good Jorge. everyone.

Starting on Let's now results. dive Slide quarter X. third into the

also quarterly bank's As portfolio. positive close turn spreads syndications Driving you NII. the be picking including in the line and income trend results by year-on-year supported to and top the loan year's pandemic. cost investment quarter low measures. throughout quarterly XXXX in $XX the moment. million. X% trend, increase can sequential will up also the credit based decrease mostly net this higher the up syndications bank levels business quarter-on-quarter a just was And XX% interest were the a this activity or XX% higher top NII XXXX Fees portfolio stable positive million Quarterly from its of further relatively expand reaching nil left up table year-on-year quarter-on-quarter and quarter on by Jorge quarter-on-quarter profit so last labor with the mentioned market on reflect In for up trend fee revenues, balances, X% and negative offsetting resuming activity in NII. impact to the as year-on-year on annual accountable transaction up income of and from and practically continues growth and a basis savings up bank took X% see market by I operating lending maintained a $X for lower as rates X% of in from profits peak quarterly beginning when the XX% months expenses, pandemic structuring during

addition, credit In provisions quality no performing pandemic. sound exposure the close with to account for and reflect the growth the quarter million in to well $X.X X% asset portfolio relate loans remaining of credit the the the bank's and with modified NPLs on

and portfolio reduced the balances coupled point or net lower reducing ended On attributable rate NII and of down lower mostly practically the or were its basis year, spreads Wider investment increase rates Slide net and both putting last quarter’s a basis and portfolio the on XXXX, up trend. losses, as with increased credit on loan asset for rate period. prior basis lending segregated a low downward XX margin the impacted re-pricing market evolution NII to by $XX XX% LIBOR for the liquidity level from Quarter-on-quarter the the commercial mostly of LIBOR of the present by million, XX, rates, down the loans effects in higher on quarter, down profits yielding the $X net the $X.X in bank's months Year-on-year, again of to variation to volume for to XX, credit market in back million X.XX% contribution was I bank's by average X% continue portfolios. September XX, and portfolio. and six reverting resulted X.XX% credit interest downward same compensated reflect investment lower from quality funds, XX volume of For reflecting account quality of allowances variation X%, rates. same re-pricing and the was effect. both substantial we the to with normal combined investment average on period increase decreasing high nine points million, by lending loans, of cost margin pressure life the points XX% in exposure negative NII XX% Slide in interest

X IFRS Stage with As I credit said as with exposure $XX X at represented previous NPLs of only representing the remain remaining unchanged or loans X origination the low loans. since XX% X% risk quarter end of credits. from risk or categorized X.X% quarter million, increased total Stage at total

the XX, XX%. Slide to capitalization bank's quarter on III end at Moving solid Tier Basel remained X

advanced IRB and this or quarter-on-quarter calculated XX% For risk based resulted requirement by by balances. assets in ratio, is approach higher up and portfolio on internal X% credit credit year-on-year capital weighted ratings on the risk

For the E have same the close mid-May respectively, market $XX launched X.X to September to was program X% the up Class been repurchase since which XX, XXXX. shares and equity of million period, mainly X% stock million levels bank's in open by program, repurchase under were due were to down

quarters credit per follow banking turn ratio calculation $X.XX the preceding also which In back to weighted to the call of you. XX% well a of Panama's our With graph above quarterly XX% capital for ratio dividend would regulator recently Basel's addition, assets In X% to Jorge. share, the stable respect representing risk earnings. payout adequacy this, like to minimum, I as present from board we left declared Thank our by with standardized mandated now and quarterly approach. the a and

Jorge Salas

Thank you, Annie.

Guatemala, to earlier up Before Sachs, would it questions, this supporting the year, facility in that highlight one women was transactions, did we Goldman open together in completely it Brazilian with issuance commercial couple deployed bank other a the World clean Bank. best in sector sponsored participation I a in we for by the and like in a one, Entrepreneurs, was ESG energy of effort

years, balance America As at optimistic, with been opportunities take the an in beginning very, and uniquely and business positioned many of Latin to presentation, have well cautiously know navigating over this very advantage keep a in the Bladex I that crisis. arising region well. XX robust we model, a agile that remains operating we for said, of sheet

up for to that, I it open like questions. So with Stephanie? will now

Operator

from Jim comes Thank first with Our you. Marrone Singular Instructions] [Operator question Research.

Jim Marrone

Yes, good questions. two morning. I have

And The Annie, question, Jorge. I direct if may. first to one it for is the second then I'll

variant prepared pressure. headwinds. particularly – in didn't your a began South the reputation The as regards I you you hyperinflation. the Central with know America, you And hear some history mentioning to to regards of with Jorge, a has anything COVID I mentioned just headwind, comments, mentioned So inflationary and American inflation, it

So supply Bladex how other regards sense are I'm providing get borrowers pressure recently, on inflation your be a reporting to just lower inflationary it they're may to from on breakdowns. you how based pressure, hearing impact of their based I business? on in trying perhaps, some are well, inflationary and guidance as may affecting the know companies chain that anything

supply chain you're from if and the And you a to, pressure. to in lend inflationary that companies so just regards issues I'm hearing getting sense

Jorge Salas

It’s several then question. a is demand of recovery the mentioned price you as good that Commodity one So disruption. very rising let question. reasons. is answer supply chain and for Inflation them, me

we shareholders responding inflationary banks where are So pressures. are to in Latin central basically America, seeing our strongly

We are adjusted seeing the tighter monetary rates. upward already have Brazil, region. interest Chile, Mexico, policy Peru, throughout

hard is this seeing increasing that demand for Bladex. Now is turn, in obviously currency what favors – financing we're that

goods As trade volumes rebounded and trade disruptions, this year. far sharply have global as

and the Now said, next And to Also fright said, significant in to supply significant shipping shortage many Do in Officer year. But Canineu, nearly may this Sam grow with the – I expected Latin levels. risk. side want COVID you trade see continue sent to XX% add rates transport disruption American our supply well. I risk, year has that poses chain XX% we induced here have semiconductor is industries to whole disruption a record in a flows Chief as perform Commercial to something. want of

Sam Canineu

you thank No, Yeah. Jorge.

– would – on inflationary have been some is that on say looking say to for to And capital, I I'll let's and prepared to choice, disruption. preempt deal results. FI capitalized inventory for our is also seeing that on see the hearing build and – the a – think that delayed clients. higher to could they the of well also that work which think which and what clients their capital, we'll positive higher – future freights say And disruption, for deliveries. working the is trend I Just we're it's any do for to favors are a this that on inflation also can that an working the of with lack positive increase overall, or net, of we've from in our course if I'd trigger I us. that by demand than the another we pressures, more this demand And rates, companies leading also us. I And continues triggers complimenting say with even they clients. that negative in are the mean,

Jorge Salas

I that answers if question? your don’t know

Jim Marrone

excellent. Yeah,

away material that of take that monetary based sheet favor actually Is on nothing Bladex. your yet terms as hit make? what policy can can really think And has could borrowers, increased is I balance I fair income I as a in or statement. comment really recap, rates that a of just interest

Jorge Salas

of will That's that a a of is I inflation good. mean, little as as I see control now. Obviously, we long inflation risk comment. bit but out don't dangerous, fair inflation of be mean, – a

Jim Marrone

Okay, thank you.

is my And to second so Annie. question directed

provide in operating to some you expenses bit more the above did the sizeable a the were think color can the to year-over-year, in Annie, you expense. I regards But So drivers why increase expenses? the noticed operating operating little higher spell relatively of – I out just

Ana Graciela de Méndez

practically took last I our a from I we decrease said, basically, expenses other at measures time work included we the saving in cost compensation, salaries in why home, the certain decrease of item that Sure, of year, last and and like that's And variable – instance, some mean, general of for line you Yeah, Jeremy. same in see expenses. year. most the

did that investments. And certain focused we on paralyzed on So – put all business to that We really also is pick well That's you year's hold see We several pandemic, year. this started showing are prior travelling. we – the very we similar levels. what year some it. on actually expense on up to and quarter. And reductions. from now that levels resulted what last expense for which other continuity a are basically, We've this had

Jim Marrone

work Okay, as so result and a basically, of right. attributed G&A the from as like, to it's well salaries as just home

Ana Graciela de Méndez

exactly. Right,

Jim Marrone

questions the then. have you. Thank all that's Okay, I

Ana Graciela de Méndez

Thank Jeremy. you,

Operator

Thank you. is, any on like Financial looking And the which Have forward? Principal identified reduce which lot. exposure would a specific Michael end? exposure with do on increase from Question to [Operator Instructions]. question have you you you to from Group. Gravis We thanks web countries a are

Jorge Salas

reduce cautious. the the significant the of foreign Costa think, And difficult February Sure, one perhaps, fiscal deal let now. Costa and the then also for have that the Bolivia, so deterioration prolonged and countries Deep fiscal year, and reforms. monitoring say potential El agreement I is and one. now side tense would And so challenges, in IMF. fiscal I GDP calls very a general need external and in those on number countries get social we're we've is next impact. of economic IMF will extent, to course, in and for Rica, its Also, up fiscal also and XX% I we're deficit, COVID-XX IMF implementing of the Rica, debt incredibly Riskier we being dealing course, agreement Also, done Government situation liquidity that looking being we're is, monitoring closely elections to me following of challenge political generation. where public The we're with that accounts, with fiscal be, an crisis lesser growing, significant exchange external potential environment. healthier say, of with negotiated reform. exposure, Salvador will Argentina.

the in remittances in would other access also Republic, say, good I the the External level Dominican by record all in US in and These difficult recovery the we've case favored America, the, And are are campaigns. Central On proven that of Panama. as successful and on they're even have DR. vaccination contained had. Guatemala had international the countries favored countries Guatemala to research of track the risks times vulnerability markets by

Mexico, despite to Brazil, with trade, related markets and to macro financial great Chile, mean, exposure these short-term resilient we exporters have are notch there Paraguay Uruguay related there. stability. comfortable and we challenges, foreign either with course, countries, Colombia, even recent important is economies I Peru. political top in and Of our institutions performance the or Smaller mostly feel

So but – know seeing was – I we're don't how that's that's if that it.

Next question.

Operator

Thank are time. questions at this no There additional you.

Jorge Salas

Alright, much and opportunity the safe. you then, very thank stay for

Ana Graciela de Méndez

you. Thank

Sam Canineu

Thank you.

Operator

Thank you. Ladies presentation. this and concludes gentlemen today's

You may now disconnect.