3Q23 Quarterly Financial Report

News provided by

Banco Latinoamericano de Comercio Exterior, S.A. (Bladex)

Oct 19, 2023, 18:27 ET

Bladex announces Net Profit increased 23% QoQ and 70% YoY to $45.8 Million, or $1.25 per share for the 3Q23; annualized return on equity of 15.9% in 3Q23

PANAMA CITY, Oct. 19, 2023 /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, announced today its results for the Third Quarter ("3Q23") and nine months ("9M23") ended September 30, 2023.

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").

3Q23 & 9M23 Financial & Business Highlights

Ascending trend in Profitability, with Net Profit of $45.8 million in 3Q23 (+23% QoQ; +70% YoY), reaching $119.8 million in 9M23 (+96% YoY), fostered by the sustained growth trend on Net Interest Income ("NII") and fee income generation.

Expanded Annualized Return on Equity ("ROE") to 15.9% in 3Q23 (+245 bps QoQ; +559 bps YoY) and 14.4% in 9M23 (+637 bps YoY).

Record level in NII, increasing for tenth consecutive quarter at $60.5 million in 3Q23 (+11% QoQ; +51% YoY), reaching $167.6 million (+70% YoY) in 9M23, driven by higher average volumes and rates. Net Interest Margin ("NIM") expanded to 2.48% in 3Q23 (+6 bps QoQ; +71 bps YoY) and to 2.44% in 9M23 (+88 bps YoY), on the back of higher lending spreads and market rates.

Strong fee income totaling $11.1 million for 3Q23 (+71% QoQ; +77% YoY), as letter of credit frees increased for eight consecutive quarters (+23% QoQ; +76% YoY), along with higher loan syndication fee activity (+248% QoQ; +7% YoY). These positive results boosted fee income to $22.4 million (+55% YoY) in 9M23.

Improved Efficiency Ratio at 27% in 3Q23 and 9M23, on the back of higher total revenues, which continue to overcompensate for the increases in operating expenses mostly related to the Bank's strategy and focus on strengthening its execution capabilities. Operating expenses increased to $19.5 million in 3Q23 (+25% QoQ; +34% YoY) and $51.0 million in 9M23 (+32% YoY).

All-time high Credit Portfolio at $9,244 million as of September 30, 2023 (+1% QoQ and +4% YoY).

Commercial Portfolio EoP balances reached a new record level of $8,244 million in 3Q23 (+2% QoQ; +5% YoY), on sustained cross-selling and new client onboarding, driving strong business volumes.
Steady Investment Portfolio at $1,000 million, entirely consisting of credit investments held at amortized cost, enhancing credit exposure diversification.

Healthy asset quality. Most of the credit portfolio (97%) remains classified as low risk or Stage 1. Impaired credits (Stage 3) remained unchanged at $10 million at 3Q23 or 0.1% of total Credit Portfolio, with a reserve coverage of 5.6x.

Record deposits at 3Q23, reaching $4,207 million (+3% QoQ and +23% YoY), coupled with ample and constant access to interbank and debt capital markets, denotes the Bank´s sound and diversified funding structure.

Solid liquidity position at $1,545 million, or 15% of total assets as of September 30, 2023, consisting of cash and due from banks mostly placed with the Federal Reserve Bank of New York (91%).

The Bank´s Tier 1 Basel III Capital and Regulatory Capital Adequacy Ratios stood at 15.4% and 13.6%, respectively, as the Bank remained committed to a sound capitalization.

Financial Snapshot
(US$ million, except percentages and per share amounts)	3Q23	2Q23	3Q22	9M23	9M22

Key Income Statement Highlights
Net Interest Income ("NII")	$60.5	$54.5	$40.2	$167.6	$98.6
Fees and commissions, net	$11.1	$6.5	$6.3	$22.4	$14.5
(Loss) gain on financial instruments, net	$0.0	($3.6)	($0.3)	($1.9)	$0.2
Total revenues	$71.8	$57.4	$46.3	$188.3	$113.5
Provision for credit losses	($6.5)	($4.7)	($4.8)	($17.5)	($13.8)
Operating expenses	($19.5)	($15.6)	($14.6)	($51.0)	($38.7)
Profit for the period	$45.8	$37.1	$26.9	$119.8	$61.0

Profitability Ratios
Earnings per Share ("EPS") ⁽¹⁾	$1.25	$1.02	$0.74	$3.28	$1.68
Return on Average Equity ("ROE")⁽²⁾	15.9 %	13.4 %	10.3 %	14.4 %	8.0 %
Return on Average Assets ("ROA") ⁽³⁾	1.8 %	1.6 %	1.2 %	1.7 %	0.9 %
Net Interest Margin ("NIM")⁽⁴⁾	2.48 %	2.42 %	1.77 %	2.44 %	1.56 %
Net Interest Spread ("NIS")⁽⁵⁾	1.83 %	1.79 %	1.43 %	1.81 %	1.31 %
Efficiency Ratio⁽⁶⁾	27.2 %	27.2 %	31.6 %	27.1 %	34.1 %

Assets, Capital, Liquidity & Credit Quality
Credit Portfolio⁽⁷⁾	$9,244	$9,114	$8,862	$9,244	$8,862
Commercial Portfolio⁽⁸⁾	$8,244	$8,114	$7,821	$8,244	$7,821
Investment Portfolio	$1,000	$1,000	$1,041	$1,000	$1,041
Total Assets	$10,095	$10,134	$9,320	$10,095	$9,320
Total Equity	$1,161	$1,128	$1,049	$1,161	$1,049
Market Capitalization⁽⁹⁾	$775	$804	$474	$775	$474
Tier 1 Capital to Risk-Weighted Assets (Basel III – IRB) ⁽¹⁰⁾	15.4 %	15.7 %	14.4 %	15.4 %	14.4 %
Capital Adequacy Ratio (Regulatory) ⁽¹¹⁾	13.6 %	13.6 %	12.2 %	13.6 %	12.2 %
Total Assets / Total Equity (times)	8.7	9.0	8.9	8.7	8.9
Liquid Assets / Total Assets ⁽¹²⁾	15.3 %	17.3 %	11.1 %	15.3 %	11.1 %
Credit-impaired Loans to Loan Portfolio⁽¹³⁾	0.1 %	0.1 %	0.1 %	0.1 %	0.1 %
Impaired Credits ⁽¹⁴⁾ to Credit Portfolio	0.1 %	0.1 %	0.1 %	0.1 %	0.1 %
Total Allowance for Losses to Credit Portfolio⁽¹⁵⁾	0.6 %	0.6 %	0.7 %	0.6 %	0.7 %
Total Allowance for Losses to Impaired credits (times)⁽¹⁵⁾	5.6	5.0	5.8	5.6	5.8

CEO's Comments

This was an outstanding quarter for Bladex. All relevant financial metrics show, once again, a very positive trend. This time with record-breaking figures.

Net income for the quarter was $45.8 million dollars. Biggest bottom-line result ever for Bladex. The resulting quarterly return on equity was nearly 16%.

Clearly, we are being able to capitalize on the bank´s structural competitive position in Latin America. We are consistently taking advantage of the different avenues for profitable growth identified in our plan."

Mr. Jorge Salas
Bladex's Chief Executive Officer

Recent Events

Quarterly dividend payment: The Board of Directors approved a quarterly common dividend of $0.25 per share corresponding to 3Q23. The cash dividend will be paid on November 16, 2023, to shareholders registered as of October 30, 2023.

Rating Update: On August 17, 2023, Fitch Ratings affirmed Bladex's Long- and Short-Term Foreign Currency Issuer Default Rating (IDR) at 'BBB/F2', respectively. The outlook remains "Stable". In addition, the Bank's National Long- and Short-Term ratings were affirmed at 'AAA(pan)'/Outlook Stable, and 'F1+(pan)', respectively, as well as the ratings of its local debt issuances in Panama and Mexico.

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

Earnings per Share ("EPS") calculation is based on the average number of shares outstanding during each period.
ROE refers to return on average stockholders' equity which is calculated based on unaudited daily average balances.
ROA refers to return on average assets which is calculated based on unaudited daily average balances.
NIM refers to net interest margin which constitutes to Net Interest Income ("NII") divided by the average balance of interest-earning assets.
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.
Efficiency Ratio refers to consolidated operating expenses as a percentage of total revenues.
The Bank's "Credit Portfolio" includes gross loans at amortized cost (or the "Loan Portfolio"), securities at FVOCI and at amortized cost, gross of interest receivable and the allowance for expected credit losses, loan commitments and financial guarantee contracts, such as confirmed and stand-by letters of credit and guarantees covering commercial risk; and other assets consisting of customers' liabilities under acceptances.
The Bank's "Commercial Portfolio" includes gross loans at amortized cost (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.
Market capitalization corresponds to total outstanding common shares multiplied by market close price at the end of each corresponding period.
Tier 1 Capital ratio is calculated according to Basel III capital adequacy guidelines, and as a percentage of risk-weighted assets. Risk-weighted assets are estimated based on Basel III capital adequacy guidelines, utilizing internal-ratings based approach or "IRB" for credit risk and standardized approach for operational risk.
As defined by the Superintendency of Banks of Panama through Rules No. 01-2015 and 03-2016, based on Basel III standardized approach. The capital adequacy ratio is defined as the ratio of capital funds to risk-weighted assets, rated according to the asset's categories for credit risk. In addition, risk-weighted assets consider calculations for market risk and operating risk.
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; as well as highly rated corporate debt securities (above 'A-'). Liquidity ratio refers to liquid assets as a percentage of total assets.
Loan Portfolio refers to gross loans at amortized cost, excluding interest receivable, the allowance for loan losses, and unearned interest and deferred fees. Credit-impaired loans are also commonly referred to as Non-Performing Loans or NPLs.
Impaired Credits refers to Non-Performing Loans or NPLs and non-performing securities at FVOCI and at amortized cost.
Total allowance for losses refers to allowance for loan losses plus allowance for loan commitments and financial guarantee contract losses and allowance for investment securities 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 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as: "anticipate", "intend", "plan", "goal", "seek", "believe", "project", "estimate", "expect", "strategy", "future", "likely", "may", "should", "will" and similar references to future periods. The forward-looking statements in this press release include the Bank's financial position, asset quality and profitability, among others. 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 coronavirus (COVID-19) pandemic and geopolitical events; 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. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. 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, October 20, 2023 at 11:00 a.m. New York City time (Eastern Time). For those interested in participating, please click here to pre-register to our conference call or visit our website at http://www.bladex.com. Participants should register 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 one hour after its conclusion.

For more information, please access http://www.bladex.com or contact:

Mr. Carlos Daniel Raad
Chief Investor Relations Officer
Tel: +507 366-4925 ext. 7925
E-mail: [email protected] / [email protected]

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SOURCE Banco Latinoamericano de Comercio Exterior, S.A. (Bladex)