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Banco Latinoamericano De Comercio Exterior (BLX)

Participants
Carlos Raad Investor Relations
Jorge Salas Chief Executive Officer
Ana Mendez Chief Financial Officer
Sam Canineu Chief Commercial Officer
Ed Vivone Head of Treasury & Capital Markets
Jim Marrone Singular Research
Pedro Escudero DOMA Perpetual
Call transcript
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Operator

Good morning and welcome to Bladex's Second Quarter 2022 Earnings Call. A slide presentation is accompanying today's webcast and is available in the Investors section of the company's website, www.bladex.com. There’s an opportunity for you to ask questions at the end of today’s presentation. This conference call is being recorded.

As a reminder, all participants will be in listen-only mode.

to line like to would I turn over the Mr. Now, Investor Relations Raad, Officer. Carlos sir. Please, go ahead,

Carlos Raad

Thank everyone, Good XXXX you. morning, earnings second joining call. quarter our and thanks for

to that allow Before to our may a differ, are and beyond current constitute materially are risks course me expectations certain which discussion statements uncertainties statements number cause on company's to of we the of that the made presentation, actual factors that subject remind may based begin forward-looking and the during and results you including could management's beliefs be control.

these please US our of description a with Commission release. filings earnings to the For and and Exchange risks, refer our Securities

questions. Officer turn available Canineu, CEO, Q&A. then detail. And Speaking today to Also financial will be priorities. this, is for our call for rest us will Salas, more strategic who overview Please, go Bladex's discuss Jorge. results All Mendez, call Sam in Executive we'll quarter that me let the the on our provide CFO, our and With the and Mr. today's Ana joining team. call quarter's your will Jorge Commercial the the the open Chief of is after ahead. our an of the second

Jorge Salas

course, last overall on stakeholders. working take Thanks, long-term the been opportunity year; strategy our all of joining I'll to overview Carlos, I have to for profitability, we and for of value Today objectives, increased us that good provide morning, discuss quarter the the ensure with second results. on like a everyone, strategy sustainability and creation our clear enhanced would results. today to start sharing an with

detail largely this in the expanding discuss in consistently book and results we the I seen more strategy quarters, plan presenting last already have behind the to are we the highlight plan and have is I place all strong growing strategic traction. been product margins. few the soon. like of a that would you Today, that during our our plan, gaining will are As

overview quarter a very strong of a let give Before, our an This was without results. you second Bladex. quarter for me doubt

momentum has Our first consecutive billion. portfolio shown with a shown eight growth in the row, now. $X.X historic credit zero in years The for book level close record reaching now commercial of NPLs over for a maintained quarter, growth to two the quarters

external want main two strong presentation. today interest environment. the an global to new for factors: X.X% demand positive for Our reaching trend, year-on-year, quarter, income an XX% about last margin results the observed in macro is strategic The equity consecutive one, the the is a plan; in make are point of That the $XX rates Ana and an five net of uncertain and later continued on quarters. that, doubled current results will quarter. in offers this opportunities I many current interest increase Bladex. The driven compared return to million. basically raising context on one, talk Net inflation, for in resulting internal commodities these last detail by high these high

environment rate points repricing, financing us accelerate in our trade second some capturing hard rates, versus obviously, its foreign reporting fiscal traditionally have financing context. this risk-weighted of banks internal that, this always will global are one, to be the important price the this higher has many our focus their Bladex. spread has demand the Having benefit factors. finally, context asset uncertain macro allows forced carries customers main strong country increased in Let lending scenario the In in in the reality happens overall, main currency opportunity demand we loan limitations. is on American own favorable for Bladex the remains, including today's for is stress, to in the loans. commodities; for who precisely focus region, point disproportional contributed Latin experiencing can me said increases; positions macro interest share risk dollar-denominated first. in we differently Also, a results, us for the the to views Latin extent increase to of short, from in directly unique Three been nature some today. provide of dollar this that a driving local affected rates geographies, that current as ones current to be and And from other the are region higher on uncertain higher own their when and is, upside point to short-term activities our and well to context two, But ways, portfolio due perfect our each the also here: America

the show consistent of and a model processes aimed product The business. an base the support by storm, After returns the volume the to of at customer explaining by enhancing the of began management business The I aims Moving COVID Bladex's Directors transaction successfully our firm, plan of series the underlying develop our strongest five-year profitability and on plan. to the are a collective to double-digit leading strategic unique the we consulting bank's with strategy Slide builds and together we over increase and Board strategic anticipating. in resiliency our plan includes significantly initiatives to plan stability a X. The process year. processes the calls incremental build on our on begin our team want navigating last upgrade offering. plan also infrastructure both our effort to part of the a new to IT for to undertook strength expanding

investor outreach relaunched Slide new and enhance now been to by RFO, and management compensation communications. led In as to part retention function this we of who Raad, talent And context, and program, a established have our a upgraded interest. has acquisition and talent we also building switch key also with shareholders' structure added our New further performance-based our team Carlos that new starts IR X. our

initiatives. As is I in new competitive earlier, mentioned of Bladex's main plan our anchored has The advantages. group strategy three

commercial initiatives low-risk and of initiatives offering; that strategy the that scale client-base our [indiscernible] IT. initiatives the of our optimize processes group talent the do to and expansion two, three profile target; to call expand we First traditionally that and we product same with have with to through have

let couple First on thoughts commercial the me share a of strategy.

in commercial region, have in Just and and the a a geography, potential there in already terms two economies of largest clear where is Mexico, we Brazil foothold. significant the

decided continues strength. We down double Caribbean, strong America opportunities. commercial and by our Central increasing provide to Similarly, have business our the these in profitable region to geographies most

decided we team commercial resulted region. of customer the number effort already have X% also the to strengthen clients expansion our This So year, in This relevant dedicated the new our active grown base. have we a portfolio. of in already has in

the year terms estimate XX% for and In to of be XX% credit volume this growth between that new attributed clients. can we of

Secondly, to the expand of product towards enhancement I our would like on initiatives of the portfolio. group geared

all solutions do loyal of consistently in product trade loans solutions. suppliers the type financing products vendor offering know, of such and risk. that short-term currency very that syndicated we credit. that local not also that market, our demanded letters enjoys base today, As primarily without products, is financing, finance and offer a margins talking a hedging generate treasury That has through by the between basic Bladex we of one customer allow series consists of offer. structured clients as better increasing Mexican the you project about arbitrages credit structures and financing I'm and services yet lateral trade-related

All products plan. of these are our being as developed part currently of

talent before and processes scorecards Finally, been two strategic tied have attract is compensation for new a members, capability, to upgrading attracting new executive new compensation mentioned essential this that underlying and has and this KPIs compensation aligning talent of as as implemented variable our sense, scheme recently team to achieve objectives shareholders. has executive the plan. I creation structure the the them well metrics aims to directly as In in with includes created with in aligning of we today value The the IT position. key My four our at top plan.

Next focus we'll that. on slide,

Finally, our broad To Board sustainable through our and Board the level Compliance Board ensure a to the manner. in of to that, named has we Sustainability Committee. wants practices do newly this all ESG the oversight that ensure

this X. Bladex's Executive Slide unit in that extensive with slide taken we Olazhir during Ledezma, year. Bladex experience to manages Committee into turned In newly on this based head the a has Moving Olazhir organization. show one, place strategy PMO in project have that we also four Number changes created strategy the office. main design, is the a a and created of office.

client ING the discipline. base in Chief Commercial Officer, new strong Canineu a a job ex-head expanding keeping wonderful our hired done also call has a of Brazil also We and price in Samuel

as you of that host me, who fourth opportunity of Carlos way Audit strong as a the the We now to brings key Day of the that Arctic as an bank in course, deeper and to take and place substance IR in extensive by it's quarter plan, experience directly new we of observance Díaz will finally part some Investor into I in idea also Chief in the hired the charge initiatives and we plan. function XXXX. And an a to ensuring maintained practice the our executives meet is IR commitment we this control, our mentioned best as give of in to strategy this upgrade the new decided implementing standards. of Raad. its Lizzeth of dive, Officer, to charge headed reports By The have well to

come best-in-class colleagues and my significant of All with experience credentials.

team remarks new Ana, talent and have we turn questions. only areas; we the hired will sales, now middle With most at and before I up that open While then course, it call pressuring, has main for of level, in our management not I make the closing some Ana? IT. to will three senior strengthened also

Ana Mendez

second the I to morning of of evolution more operations go this year. on business good and of Jorge results the will into and our detail during now all. quarter Thanks

one over spreads Brazil the that maturities loans to by of to maturing one and be basis the on to XX points at except percentage by XX% that across exceeded quarterly maturing commercial model our and and slide remains the number this characteristic X. next X, half again trend the months countries and let's we Lending the each up can portfolio. new growth with and These denotes recent average Exposure nature credit Peru approximately within of quarters. for represented of short-term turnover Once exceeded points, business In relatively reinforcing stable evenly those X%, distributed sectors. by two XX% year. positive and continues country respectively. slide please see fast $X portfolio, quarter's billion tenure of the So than of more remaining move XX disbursements collective

period. of oil issuers, total terms financial growth, complemented investment downstream, by quarter, from on Total mainly percentage levels left now billion to In in by record the of point investments the in each gas us the XX% representing our diversify other commodity sheet of as by assets the of present allows including representing $X seen US non- the our a one evolution this structure portfolio quarterly to and end of country, exposure. total. credit LatAm to which reaching the at XX% loan the close represent set down such sectors, growth back portfolio, quarter institutions related the prior graph due to again from slide, of the further following we exposures in balance XX% sustained strong the In of as sectors,

right As graph well-diversified asset been growth this to the presented a supported has base. by on consistently the funding

a global range where banks a US exclusively global continued level corresponding from not but a as XX% as shareholders, $X well deposits A the the by of is and for Complemented of credit coming which markets Class by is XX% access recurring our availability stinted issuer, First, capital our over from of loan Bank wide Yankee bilateral lines program. from Mexico to CD in mainly and the of Central and billion, Bladex resilient ample market.

million $XX XX% slide from to our operations. the up for by summarize of last results from Turning than was Quarterly previous doubled more year. quarter, and we XX, profit

loan mentioned has trend during of growth the second I our second a quarter enhancement. call, sustained are of a at tendency As combined quarter seeing first last the the quarter, we that in end margin with full the of strong continued quarterly experienced the during impact

of XX% relevant now. the up and transactions execution result, from line year more mainly Indications positive half top picked second a revenue Q-on-Q performance, from three by fee was up while growth be letters credit have in the driven right As of income NII denote last mandated XX% and a as should activity solid year, in has trend. we

mainly $X quarter asset balance compared the charge quality, March. to credit sequential for billion, first in increase provisions with at in of year, the at lower quarter a provision $X.X second of the the XX% terms or billion the of associated were substantially In million this $X portfolio close

quarter, improved second XX% in strong to growth more the efficiency million. $XX than offset expenses, totaled operating increase an During revenue as which

new incremental and covered hires performance, earlier, In can supporting the been to case are quarter. strategy that financial salary-related variable business so expenses design, mentioned annual by compensation drove all an programmed, has with closely strategy As in as Jorge tied in new execution the execution along, the by by be expenses. together underlying growth, increase any case this revenues structure they

see strategy, the to further this under business we we -- term. expect medium in up As to further in improvements the efficiency scale new

$X.X previous an of positive from reaching resulted with million move year of additional $X.X NII. the and in effect $X.X margin a previous of quarterly the $X.X in previous quarter At resulted more rate million combined same the and in million second net interest from quarter. positive $XXX net the on to to and average in million financial on million $X.X net related and in investment presenting slide on evolution loan accompanied and liability NII portfolio from now impact time, increase proactive the Let's the volume increase management, X.XX% billion NII XX, liquidity year-on-year in the respect Strong credit quarter. of last trend the detail growth year-on-year quarter

the rate, the US of focus has to to profile in the spread basis are the the to basis and graph US the spreads increased reference during Bladex's a commodity from given base XX This which for shown graph lending nature X.XX% the latter up financial top increasing the all-in financial trade year the left gap. right, of average our differential region, the the to the presented book, at paying on and higher ago right slide segment, similar the lending by XX, bank's graph a dollar expansion trend, short-term at from been previous usually financing As quarter. lending if extending of dollar based and due a loans set bottom prices, interest maturity of increased pace, loans when Moreover, points the in liabilities, at points the quarterly rate average spreads, quarter, reflects lending volumes on XX on between positive corporate market as liabilities coupled institutions, denotes superior and across higher demand relative lower rate rate shown with mainly mostly reaching to followed debt our and profitability. higher and in

and As operate. have spreads countries we a result, all in in increased sectors, business which segments

XX. slide to on asset Moving solid. remains Bladex quality

of total close credit X% to First, a three at loans. unchanged Stage level NPL or of remain

a previous addition, the $XX provisions respect with XX% million maturity to $X.X with quarter, was coverage and improvement, quarter. second in by million reduction close the to reflects down X. of credit collection Stage profile In scheduled Stage exposure the during to two allowance risk client reclassification continued for reserve releasing of This both, credit

average origination, loan addition credit on total for of points. shows during Please position. one slide million coverage our which at now the accounts to XX% In reserves of basis requiring increased new $XXX by the in million capital XX, Phase let's quarter which move exposure XX $X.X an

management one unchanged capital, reached a preceding the open standards. loan At strong earnings. trend sustaining Basel quarters capital to Phenomena a in growth alternatives, at critical dividends, to ratio per more above regulatory' position. capital in going mentioned, international With remains our of stood remain recognized growth a XX%. and $X.XX strength quarter Board model quarterly respect, and at from continued adequacy we feel recently capital a invested use In pillar capital end, ratio I forward. achieved business returns, XX% second share Both support in the now ratings. a III minimum declared we of and this XX% increasing excess quarter having respect our to bank's efficient The As Tier of representing factor while loan in regulatory have well of

call you. like to Thank Jorge. would I Here, now turn to back the

Jorge Salas

Thank Ana. you Great job.

As pleased I said are we before, very are traction gaining, and the with operational the we both front. in the front in also financial

environment to continue capabilities the and our a execution asset Day provide in on year look QX. build to from robust strategy in of deeper continue on five-year to you with on on current forward benefiting maintaining our also quality, launch profitability. share, delivering insight we the the As to all are you while enhanced with that the and Investor strategy I we planning later the the progress a we're

would for like up the I Now, to open it Q&A section.

Operator

presentation. much the very you for Thank

We the will Q&A part now move call. [Operator into Instructions] Thank of you. the

Our Research. first comes ahead, from Please sir. go Jim from Marrone Singular question Mr.

Jim Marrone

taking well. thank that my Well, me you call. I can trust for hear Yes. you

Operator

Yes Please go ahead.

Jim Marrone

Okay. Great.

a – higher from seems interest good It So capitalizing very well very rates. job.

that's well don't from think job done, that very away a to and you. I So I put want

the to that, to to softening inflation I as bring inflation Bladex that's the a going with currently clients. with and of mainly that to if with spending impacting spending forward regards inflation and the consumer can forward some result just to headwinds as clients lower to in consumer attention a as perhaps, regards perhaps So going of and impact how well the lap regards respect

Jorge Salas

Very you. Jim. right This good Jorge question. is Salas. Thank All

material affect itself this happened of course deterioration, standstill the Having a complete after Bladex. we size, storm. we said prolongs As of like the will for is the not margins. the stronger feel see recession what quality looks foresee, the sure and which however, the that came positive of loan in the especially of that our with We storm our we might demand call, at I a a any that during diminish region into world beginning we storm. before the I aggregate after that do if in material considering mean, course for turns that book it whole overall said, and environment recession out current asset of COVID asset even

necessarily is question. size positive So, but not short if terms terms in that quality. your asset know asset and answers challenging far so in of margins, I answer potentially don't of

Operator

second for have I think we investor. lost a

Why in with come Number shortly Instructions] that number came Two light, read again. two, decision and book back relative that's line not trade I'll Congratulations the stock growth actively dividend perhaps the value? the strong the negligible you nonaccruals will should very NIM how [Operator We message nearly Please in two XX% back at expand expanding on company your once book bring to allocation. levels regarding questions on questions in in do the to pre-COVID And is with one. buying text of back meantime, meantime. BLX not think via NII capital significant value? the quarter. the

Jorge Salas

regarding you has allocation, asset for clearly we're level. question. the capital Thank here Yeah. before. Questions Bladex in size a been not new

want and our course, make have course all well obviously sure return dividend policy. we Our is managing, to of capitalized. best our have the you to say I add to anything? that, of that And been I remain the don't if ratios capital know to decisions Ana, possible shareholders involves value allocation asset-capital that We Board shrinking.

Ana Mendez

to a of Yes. That and $XX. valuation up having the undervalued definitely current level it We're sums of much in our close at terms course. value book pretty of

and aim about, asked course that. over what that it's be level You we way the would at of

Operator

you Thank much. very Okay.

DOMA comes Pedro Mr. sir. Perpetual. from ahead go Our next Please question from Escudero

is line open. Your

Pedro Escudero

Hi everyone.

return don't equity of are and questions, equity, think Following and all you return to is not obviously between that equity price that a over a relationship understand the because you X%. one? going you're without lending How that if price book return the so I do prior to of book you doing on is is to to because return calculator your far feasible. you're The that, reality expect lending

book expecting are outsourcing That's else someone it lending your It here? of equity basically. to but your your institutions. that, you're increase is make net doesn't doing said just reality is credit price to the is unsecured book to to your while lending of the the on because financial sense. we that a to XX% to strategy. you You're decisions any financial So to return basically disaster value lend institutions What what a are

in my earnings terms which increases to should capital you to a shareholders. have of Additionally, This which and value of the actually which as buying further increases the stock is return loss decreases is, be question strategy to a back book a dividend return policy actually percentage be disaster value shareholders. good used massive of the

Board from flow. the lending flow. standards. by think way, lending is is your I the actually So comes strategy the is your It standards is And

You have than zero But have claim you basically -- or even if you loans net you say loans. X% can entire income. out like of something percent zero your nonperforming wipe that would less I that nonperforming

strategy is think actually as understand what And Board whole for hope to I this, that flowed time. a the starts shareholder, on. change actually a but is don't of all So I even going they your long being

to going return The price while that is And creates financial up. to low So institutions basically book lending spreads? return to all a very that justify at really lending you the a why on going are have on can reality you going on of is my equity, that equity. the create side? it super question what's you you stock And the price low to is

my questions. So are those

Jorge Salas

institutions, financial have you, the would And that went in to regards storm, margins. have fashion. sustainable curious the Pedro. is, increase that the the caller. previous decreasing opposite it find happening that, point to mention things. precisely storm I your a COVID to I of seen as our we on been of we Thank lending a One couple by is

and between banks wholesale book far in see where XX% which are As we the as strong don't return return clean X% with capitalization we many that such is this a on equity, this. In want don't planning have today. if different complement. we to views short, I lending in you're we charge that. manage to how you Sam And on, of know, increase we're

Sam Canineu

Officer. is is lending. upside This is there for Chief Samuel I doing. is us Canineu, say changing a what not that which with the direction -- definite is the margin trajectory, previous that at we're -- right? nothing Jorge. here that that think would Sure, challenging continue trajectory to I there agree have in quarter, you or that see This to Commercial with capital I necessarily lending look downward space our which you the do profitability there same institutions to upward standards one of credit the this our if a we place improve on terms don't riskier wrong, space is going. profitable still at shift credit trajectory to you are very and more there's on establish committed we to that and time, you quarter But other our there the discipline. is see sector the you financial change can I And materially believe you underwriting without that's from because is the we're NPLs. our direction analyze And still to but our

So, I responsibly. and executing it, is on of we're course that but there agree upside

Operator

you very Thank much.

comes ahead, Tom Please Mr. Private McGuire Investor. sir. question Our [ph], from next go

is line open. Your

Unidentified Analyst

Good my morning question. and thanks for taking

to recession you reserves you of does a recession. have your repricing put economy high. is are it in short-term in in You business? explained my how terms helping increasing loans prices plus question And could that Do just for continues And new be you inflation commodity a a accelerated would what currently are or as reserves lead But it playbook? and loans originated? business well is do do poor if

Jorge Salas

your for question. Tom, you, Thank

in foresee will of of all do countries course closely as And and future that that if do sectors aggregate yes, anticipate will sustainable will downgrade that scenario foresee recession For we and we answer our is provisions and we potential perhaps near is increase accordingly. a affect monitor some we clients. and demand the countries and we

Unidentified Analyst

Okay.

and be and the that to Day new in that on going other Now in Analyst will Relations or Manager will you're New Panama? one be the Analyst question it Day have York Investor

Jorge Salas

question. good deciding. We're A still

be let but also to everybody We'll We know plans we're the to continuing are when it New reading York, time virtually. comes. in do

Unidentified Analyst

known. schedule worth Okay. then well guys would consider Good. outside investors think secondly, either person? telling an hiring firm meetings or I virtually do and to Because with it's IR is And your you in story not

Jorge Salas

Carlos new have set calls and handles IRO if that external and an help adviser our up will that do we meetings Raad, necessary. us

Unidentified Analyst

good. Okay, Thank you much. very

Jorge Salas

you. Thank

Operator

next sir. Instructions] from as go Adam [ph], Mr. ahead, [Operator Our Hegarty Investor Please Private question comes well.

Your line is open.

Unidentified Analyst

see bit and some make continuing question. I little terms then love a harsh you. the lot well. as excited shareholder plans quick also previous quarter I'm showed share growth would buybacks a comment my on like to had hear as future. of a and less gentlemen. the some just ask Thank long-term than the of to Hello Congratulations your callers. I would and I that your a for company to

this can and by environment effect You would XX%. share different there's a speak billion balance But how you're not there it the I loan the guys roughly you on realize issued? at the book. I And you've with concerns of some last quarter use had effect there comments that some some that made as lower to rising that to interest credit that B on count question then. the and level, price could Thank is, And environment to reduced well they value the book the share almost the you single the had you $X rate value? and portfolio the your see as BB issuers balance own you were they then that more you. to that. going And see second have debt in about just your for debt quality my sheet love But on

Jorge Salas

questions. you your Thank for

Ed our Treasury investment to we going with to of loan Head book, in maturity complement and the Vivone that portfolio I'm here Markets, a Ed? to the to pass Capital Regarding word our me. have hold

Ed Vivone

pretty market. hope of any our is I the in credit a very incremental of though complement with know aim repo have the fast Good to invested other to this the and issuers reputable the One case with provide overall questions, has roughly morning. relationships is In portfolio the main as answered investment corporate to portfolio, And is the further example, our Around What to portfolio American very possibility other a evolution region XX% of and expectation are high if Hello. of or both even you inside loan constructed firms. taking so exposures. portfolio rates. these rated the Colombia, with all portfolio good of one the this diversification. been also of is loan in countries, half into and two a names Jorge complement good bond very we the outside is the mean, portfolio the designed that your investments diversification question. that a But Latin-American for I achieving that balance region the countries these inhibits I their objectives. explained grade. very, financial the portfolio selling duration liquid many I is strong invested have issues and geographic investment the that to half blob US investment, a to is nutshell is have interest Latin short nutshell, mean, and our don't bond And have predominantly case for to of grade and higher in of generate provide a access income respective I Brazil may names. maintain of to of a consideration and be added happens the is the

Operator

have the we for Thank this much. you their team pass point. remarks. very looks Bladex back will further the to It line I questions management concluding no like at

Jorge Salas

to and you you you strategic and of Bye. look our forward stay you questions, plan. everybody with safe. Thank for share everybody thank the progress thank Yes, and your operator,

Operator

very conference much. you Thank today's We'll be good lines. and This the now have closing concludes call. all you Goodbye. a day. Thank