PANAMA CITY, Feb. 14, 2020 /PRNewswire/ -- Banco
Latinoamericano de Comercio Exterior, S.A. (NYSE: BLX,
"Bladex", or "the Bank"), a Panama-based multinational bank originally
established by the central banks of 23 Latin-American and
Caribbean countries to promote
foreign trade and economic integration in the region, today
announced its results for the fourth quarter ("4Q19") and full year
("FY19") ended December 31,
2019.
The consolidated financial information in this document has been
prepared in accordance with International Financial Reporting
Standards ("IFRS") as issued by the International Accounting
Standards Board ("IASB").
FINANCIAL SNAPSHOT
(US$ million, except
percentages and
per share amounts)
|
2019
|
2018
|
4Q19
|
3Q19
|
4Q18
|
|
Key Income
Statement Highlights
|
|
|
|
|
|
|
Net Interest Income
("NII")
|
$109.5
|
$109.7
|
$26.9
|
$26.7
|
$28.0
|
|
Fees and commissions,
net
|
$15.6
|
$17.2
|
$5.4
|
$2.8
|
$5.4
|
|
Total
revenues
|
$126.7
|
$127.6
|
$31.4
|
$29.5
|
$34.1
|
|
(Impairment loss)
reversal on financial instruments
|
($0.4)
|
($57.5)
|
$1.9
|
($0.6)
|
$1.3
|
|
Gain (loss) on
non-financial assets
|
$0.5
|
($10.0)
|
$0.0
|
$0.5
|
($2.3)
|
|
Operating
expenses
|
($40.7)
|
($48.9)
|
($11.3)
|
($9.0)
|
($12.4)
|
|
Profit for the
period
|
$86.1
|
$11.1
|
$22.1
|
$20.4
|
$20.7
|
|
Profitability
Ratios
|
|
|
|
|
|
|
Earnings per Share
("EPS") (1)
|
$2.17
|
$0.28
|
$0.56
|
$0.52
|
$0.52
|
|
Return on Average
Equity ("ROAE")(2)
|
8.6%
|
1.1%
|
8.7%
|
8.0%
|
8.3%
|
|
Return on Average
Assets ("ROAA")
|
1.36%
|
0.17%
|
1.34%
|
1.34%
|
1.20%
|
|
Net Interest Margin
("NIM")(3)
|
1.74%
|
1.71%
|
1.65%
|
1.77%
|
1.61%
|
|
Net Interest Spread
("NIS")(4)
|
1.19%
|
1.21%
|
1.18%
|
1.19%
|
1.08%
|
|
Efficiency
Ratio(5)
|
32.1%
|
38.3%
|
35.9%
|
30.4%
|
36.3%
|
|
Assets, Capital,
Liquidity & Credit Quality
|
|
|
|
|
|
|
Commercial
Portfolio(6)
|
$6,502
|
$6,290
|
$6,502
|
$6,217
|
$6,290
|
|
Investment
Portfolio
|
$80
|
$107
|
$80
|
$85
|
$107
|
|
Total
assets
|
$7,250
|
$7,609
|
$7,250
|
$6,681
|
$7,609
|
|
Total
equity
|
$1,016
|
$994
|
$1,016
|
$1,009
|
$994
|
|
Market
capitalization(7)
|
$847
|
$684
|
$847
|
$790
|
$684
|
|
Tier 1 Basel III
Capital Ratio (8)
|
19.8%
|
18.1%
|
19.8%
|
21.1%
|
18.1%
|
|
Total assets / Total
equity (times)
|
7.1
|
7.7
|
7.1
|
6.6
|
7.7
|
|
Liquid Assets / Total
Assets (9)
|
16.0%
|
22.4%
|
16.0%
|
14.4%
|
22.4%
|
|
Credit-impaired loans
to
Loan Portfolio(10)
|
1.05%
|
1.12%
|
1.05%
|
1.11%
|
1.12%
|
|
Total allowance for
losses to Commercial Portfolio(11)
|
1.57%
|
1.65%
|
1.57%
|
1.67%
|
1.65%
|
|
Total allowance for
losses to
credit-impaired loans (times)(11)
|
1.7
|
1.6
|
1.7
|
1.7
|
1.6
|
|
FY19 & 4Q19 Highlights
- Profit for FY19 totaled $86.1
million, compared to $11.1
million in FY18, primarily from lower impairment losses and
improved operating efficiency on reduced operating expenses (-17%
YoY), along with steady top-line revenues YoY.
- Bladex's 4Q19 profit increased 8% QoQ and 7% YoY to
$22.1 million, or $0.56 per share, as improved revenues and
reversal of impairment losses offset higher operating expenses
QoQ.
- Net Interest Income ("NII") for FY19 totaled $109.5 million (stable YoY) with Net Interest
Margin ("NIM") of 1.74% (+3 bps), and Net Interest Spread ("NIS")
nearly stable at 1.19%. NII for the 4Q19 improved 1% QoQ to
$26.9 million, mainly on higher
average lending volumes. The quarterly YoY decrease of 4% was
mainly due to lower lending spreads and the net effect of lower
average market rates, partly compensated by the decrease in average
low-yielding liquidity assets.
- Fees and commissions income totaled $15.6 million for FY19, -9% YoY on lower fees
from letters of credit (-12% YoY). The Bank closed six syndicated
transactions in FY19 for a total of $5.6
million, up from $4.9 million
in FY18. In 4Q19, fees totaled $5.4
million from structured transactions and improved fees from
the Bank's letters of credit business, up 4% QoQ and up 7% from
4Q18.
- Efficiency Ratio was 32% for FY19 (-6pts YoY) as operating
expenses decreased 17% YoY with total revenues nearly stable (-1%
YoY), reflecting effective cost control management and overall
improved structural and operational efficiencies. 4Q19 Efficiency
Ratio was 36% (+6pts QoQ; stable YoY) as improved revenues QoQ were
offset by higher operating expenses from employee-related expenses
and other seasonal expenses.
- Return on Average Equity ("ROAE") was 8.6% in FY19 compared to
1.1% in FY18. 4Q19 annualized ROAE was 8.7% vs. 8.0% in 3Q19 and
8.3% in 4Q18. The Bank's capitalization remained solid with Tier 1
Basel III Capital Ratio of 19.8%, with risk-weighted assets up QoQ
due to Commercial Portfolio growth and down YoY due to a shift to a
lower risk country exposure of the portfolio.
- End-of-period Commercial Portfolio balances increased 5% QoQ
and 3% YoY to $6.5 billion in 4Q19.
Average balances were up to $6.2
billion for the 4Q19 (+6% QoQ; stable YoY) and $6.1 billion for FY19 (stable YoY).
- Credit-impaired Loans, also referred to as Non-Performing Loans
or NPLs, were $61.8 million, or 1.0%
of total Loan Portfolio, at the end of 4Q19. This compares to
$64.7 million, or 1.1% of total Loan
Portfolio, a year ago. No new NPLs were recorded during 2019. Total
allowance for credit losses was 1.7 times NPL balances for
4Q19.
CEO's Comments
Mr. N. Gabriel Tolchinsky,
Bladex's Chief Executive Officer said, "In 2019, the global
economy experienced its weakest year of growth since the financial
crisis, weighed down by tensions that have significantly slowed
international trade. The main drivers for the lackluster
performance were the trade war between the US and China, negative trade flows that disrupted
supply chains, and idiosyncratic risks in some countries.
2019 was also a very difficult year for Latin America regionally. Economic
growth came in significantly below beginning of year expectations
and significantly below last year's levels. Of the largest three
economies of Latin America,
Brazil was the only one that
showed any signs of life, though growing tepidly, while
Mexico stagnated, a remarkable
decoupling from a strong US economy and Argentina´s GDP
shrank.
We regard Brazil as the main
potential driver for economic growth in the Region. That
said, Colombia and Peru should also perform well. But with
(a) commodity prices depressed because of trade uncertainties and a
strong US dollar, (b) Mexico stuck
in low or no growth mode due to needed fiscal restraint, tight
monetary policy to keep portfolio moneys flowing and a fundamental
lack of investment, (c) potential social unrest in Chile and (d)
smaller countries like Costa Rica mired in a fiscal red ink and
Ecuador struggling to comply with the IMF program, we simply do not
see other countries as significant contributors to Regional
growth.
We continue to believe that the current macroeconomic context
offers no room for complacency. Furthermore, low growth
combined with risk aversion is exacerbating liquidity for top names
in the Region, compressing their margins, while not always
compensating for the risk these credits represent.
Nevertheless, Bladex´s book of business is solid as we have
been able to add new clients, shift exposures to lower risk
jurisdictions and structure value added transactions. We achieved
our current profitability levels despite this very challenging
environment. Over the past two years, macroeconomic risks,
slow regional economic growth, tepid trade flows, idiosyncratic
country and industry risks have been the norm. And, all these
risks were coupled with an overwhelming amount of liquidity chasing
the same creditworthy clients. If Bladex can deliver 8.6%
ROAE with these headwinds, we should be very well positioned to
deliver more sizeable returns in more benign environments that
surely will come. We are keenly aware of the risks in the
Region's industries and entities we finance. And, I can say
with confidence that our team knows how to spot opportunities and
deliver results.
We continue to diversify our funding sources beyond our
typical Central Bank deposits, bilateral lines of credit, capital
markets and international borrowings. We recently started a
new Yankee CD program that will complement our short-term funding
structure.
On the cost side, expenses continue to stay under
control.
Against this backdrop, the management of Bladex, and its
Board of Directors, is cautiously optimistic for 2020 and look for
a continuation of the profitability path we embarked on in the last
five quarters."
RECENT EVENTS
- Quarterly dividend payment: The Bank's Board of
Directors (the "Board") approved a quarterly common dividend of
$0.385 per share corresponding to the
fourth quarter 2019. The cash dividend will be paid on
March 12, 2020, to shareholders
registered as of February 26,
2020.
- Appointment of Director: After a thorough
selection process, the Board appointed Ms. Alexandra M. Aguirre as Director representing
all classes of shares, in replacement of Mr. Gonzalo Menendez Duque, who passed away on
June 29, 2019. Ms. Aguirre will
serve for the remainder of the term, set to expire in April of
2021.
- CEO succession: As part of an orderly and
programmed succession plan, the Board announced on January 27, 2020, that, effective March 9, 2020, Mr. N. Gabriel Tolchinsky will step down as Chief
Executive Officer, and will be succeeded by Mr. Jorge Salas.
Notes:
- Numbers and percentages
set forth in this earnings release have been rounded and
accordingly may not total exactly.
- QoQ and YoY refer to
quarter-on-quarter and year-on-year variations,
respectively.
Footnotes:
1) Earnings per Share
("EPS") calculation is based on the average number of shares
outstanding during each period.
2) ROAE refers to return on
average stockholders' equity which is calculated on the basis of
unaudited daily average balances.
3) NIM refers to net
interest margin which constitutes to Net Interest Income ("NII")
divided by the average balance of interest-earning assets.
4) NIS refers to net
interest spread which constitutes the average yield earned on
interest-earning assets, less the average yield paid on
interest-bearing liabilities.
5) Efficiency Ratio refers
to consolidated operating expenses as a percentage of total
revenues.
6) The Bank's "Commercial
Portfolio" includes gross loans (or the "Loan Portfolio"), loan
commitments and financial guarantee contracts, such as issued and
confirmed letters of credit, stand-by letters of credit, guarantees
covering commercial risk and other assets consisting of customers'
liabilities under acceptances.
7) Market capitalization
corresponds to total outstanding common shares multiplied by market
close price at the end of each corresponding period.
8) Tier 1 Capital is
calculated according to Basel III capital adequacy guidelines and
is equivalent to stockholders' equity excluding certain effects
such as the OCI effect of the financial instruments at fair value
through OCI. Tier 1 Capital ratio is calculated as a
percentage of risk-weighted assets. Risk-weighted assets are
estimated based on Basel III capital adequacy guidelines.
9) Liquid assets refer to
total cash and cash equivalents, consisting of cash and due from
banks, and interest-bearing deposits in banks, excluding pledged
deposits and margin calls. Liquidity ratio refers to liquid
assets as a percentage of total assets.
10) Credit-impaired loans
are also commonly referred to as Non-Performing Loans or
NPLs. Loan Portfolio refers to gross loans, excluding
interest receivable, the allowance for loan losses, and unearned
interest and deferred fees.
11) Total allowance for
losses refers to allowance for loan losses plus allowance for loan
commitments and financial guarantee contract losses.
SAFE HARBOR STATEMENT
This press release contains forward-looking statements of
expected future developments within the meaning of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements in this press release include the growth of the credit
portfolio, including the trade portfolio, the increase in the
number of the Bank's corporate clients, the trend of lending
spreads, changes in activities engaged in by the Bank that are
derived from the Bank's client base, anticipated operating results
and return on equity in future periods, including income derived
from the Treasury Business Segment, and changes in the
financial and performance strength of the Bank. These
forward-looking statements reflect the expectations of the Bank's
management and are based on currently available data; however,
actual performance and results are subject to future events and
uncertainties, which could materially impact the Bank's
expectations. Among the factors that can cause actual
performance and results to differ materially are as follows: the
anticipated changes in the Bank's credit portfolio; the
continuation of the Bank's preferred creditor status; the impact of
increasing/decreasing interest rates and of the macroeconomic
environment in the Region on the Bank's financial condition; the
execution of the Bank's strategies and initiatives, including its
revenue diversification strategy; the adequacy of the Bank's
allowance for expected credit losses; the need for additional
allowance for expected credit losses; the Bank's ability to achieve
future growth, to reduce its liquidity levels and increase its
leverage; the Bank's ability to maintain its investment-grade
credit ratings; the availability and mix of future sources of
funding for the Bank's lending operations; potential trading
losses; the possibility of fraud; and the adequacy of the Bank's
sources of liquidity to replace deposit withdrawals. Factors or
events that could cause our actual results to differ may emerge
from time to time, and it is not possible for us to predict all of
them. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
ABOUT BLADEX
Bladex, a multinational bank originally established by the
central banks of Latin-American and Caribbean countries, began operations in 1979
to promote foreign trade and economic integration in the Region.
The Bank, headquartered in Panama,
also has offices in Argentina,
Brazil, Colombia, Mexico, and the
United States of America, and a Representative License in
Peru, supporting the regional
expansion and servicing its customer base, which includes financial
institutions and corporations.
Bladex is listed on the NYSE in the
United States of America (NYSE: BLX), since 1992, and its
shareholders include: central banks and state-owned banks and
entities representing 23 Latin American countries; commercial banks
and financial institutions; and institutional and retail investors
through its public listing.
CONFERENCE CALL INFORMATION
There will be a conference call to discuss the Bank's quarterly
results on Friday, February 14, 2020
at 11:00 a.m. New York City time (Eastern Time). For
those interested in participating, please dial (800) 311-9401 in
the United States or, if outside
the United States, (334)
323-7224. Participants should use conference ID# 8034, and
dial in five minutes before the call is set to begin. There
will also be a live audio webcast of the conference at
http://www.bladex.com. The webcast presentation will be
available for viewing and downloads on http://www.bladex.com.
The conference call will become available for review on
Conference Replay one hour after its conclusion and will remain
available for 60 days. Please dial (877) 919-4059 or (334)
323-0140, and follow the instructions. The replay passcode
is: 44638262.
For more information, please access http://www.bladex.com or
contact:
Mrs. Ana Graciela de Méndez
Chief Financial Officer
Tel: +507 210-8563
E-mail address: amendez@bladex.com
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SOURCE Banco Latinoamericano de Comercio Exterior, S.A.
(Bladex)