NYSE:BLX Banco Latinoamericano de Comercio Exterior, S. A. Q1 2024 Earnings Report $39.35 +0.72 (+1.86%) Closing price 05/2/2025 03:59 PM EasternExtended Trading$39.38 +0.03 (+0.09%) As of 05/2/2025 04:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Banco Latinoamericano de Comercio Exterior, S. A. EPS ResultsActual EPS$1.40Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/ABanco Latinoamericano de Comercio Exterior, S. A. Revenue ResultsActual Revenue$72.60 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/ABanco Latinoamericano de Comercio Exterior, S. A. Announcement DetailsQuarterQ1 2024Date4/18/2024TimeN/AConference Call DateFriday, April 19, 2024Conference Call Time11:00AM ETUpcoming EarningsBanco Latinoamericano de Comercio Exterior, S. A.'s Q1 2025 earnings is scheduled for Monday, May 5, 2025, with a conference call scheduled on Tuesday, May 6, 2025 at 11:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Banco Latinoamericano de Comercio Exterior, S. A. Q1 2024 Earnings Call TranscriptProvided by QuartrApril 19, 2024 ShareLink copied to clipboard.There are 4 speakers on the call. Operator00:00:00Good morning, ladies and gentlemen, and welcome to Bladex First 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. There will be an opportunity for you to ask questions at the end of today's presentation. Please note, today's conference call is being recorded. As a reminder, all participants will be in listen only mode. Operator00:00:29I would now like to turn the call over to Mr. Jorge Salas, Chief Executive Officer. Sir, please go ahead. Speaker 100:00:37Good morning, everyone, and thank you for joining to discuss our 2024 Q1 results. I will start by providing a high level summary of our performance and then Ani Mendez, our CFO, will discuss the results in more detail. After that, I'll make a couple of comments regarding key initiatives in our strategic plan, and then I will open the call for questions. 2024 had a very strong start, extending the positive profitability trend from the previous quarters. This is notable not only because Q4 had a couple of positive one off transactions, but more importantly, because we have been able to achieve these results in a more challenging landscape marked by reopening of debt capital markets, increased liquidity in domestic and global markets and also increased competition from local and international banks. Speaker 100:01:35In this context, we have managed to grow our portfolio, maintain our income generation, protect margins, increase deposits and continue generating significant fee income throughout the Q1 of the year. Moving on to Slide 2. Here we show the highlights of the Q1 results. Starting with the balance sheet, growth of the credit book was 3% quarter on quarter and 12% year on year with pristine asset quality. At the same time, deposits increased 7% quarter over quarter and 32% year on year, gaining the largest share of our funding structure. Speaker 100:02:18As a result of the continued growth on the deposit base, the bank has been tactically reducing the use of bilateral facilities from corresponding bank. This is, of course, has benefited our funding costs. Also during the Q1, Nudadex once again topped the Mexican debt capital markets with a new bond placement for MXN 3,000,000,000, equivalent to MXN 180,000,000 which is widely oversubscribed. Today, close to $1,300,000,000 almost 15% of total funding come from the Mexican market. On the P and L side, we are seeing margins stabilizing at the level we projected for the year with NIM close to 2.5%. Speaker 100:03:05Fee income, on the other hand, also had a strong quarter, led primarily by solid revenues from our letters of credit. All this led to a net income of $51,300,000 for the quarter, 11% higher than our previous record breaking Q4 and 39% higher year on year. Finally, we're excited to report 16.8% ROE for the quarter, an improvement of 126 basis points over the last quarter. I'm going to leave the highlights here for now and turn the call to Annie, our CFO, who will talk about the results in more detail. Annie? Speaker 200:03:49Thank you, Jorge. Good morning to everyone. I will now go into more detail on the financial performance during the Q1 of 2024, starting on Slide number 3. As Jorge introduced, the bank continued to improve its bottom line results, reaching net income in excess of $51,000,000 during the Q1, up by 39% from last year and 11% from the previous quarter. On the back of these strong results, the annualized return on equity reached a notable 16.8%. Speaker 200:04:23Let me now walk you through our balance sheet and profit and loss statements, underlining the main items driving this sustained exceptional performance. Moving on to Slide 4, Bladex balance sheet remained stable from the previous quarter at $10,700,000,000 up by 16% from the year before on the basis of continued growth in the loan and investment portfolio balances along with a sound liquidity position. The bank's cash position, which is mostly placed with the Federal Reserve Bank of New York, stood at $1,700,000,000 at quarter end, representing 16% of total assets and 37% of liability deposits. Our prudent liquidity management approach follows Basel Methodology's liquidity coverage ratio, as required by Panama's banking regulator. Along with strong asset quality and capitalization, a sound liquidity position represents a pillar of the Bank's investment grade ratings. Speaker 200:05:28More details on the other 2 main asset components, loans and investment securities, are presented in the following slide. The Bank's investment securities portfolio reached $1,100,000,000 at quarter end. 77% of this portfolio is placed with non LatAm issuers, mostly from the U. S, providing country risk diversification to our credit book. Furthermore, 81% is placed with investment grade issuers and is eligible to be discounted with the Federal Reserve through our New York agency, thus providing contingent liability funding. Speaker 200:06:08The average remaining tenure of the portfolio is a little over 2 years. The Bank's core business is represented by the commercial portfolio, which includes loans as well as off balance sheet items such as letters of credit and guarantees. The commercial portfolio reached $8,700,000,000 at quarter end on a continued positive growth trend, having increased by 2% from year end 2023 balances and 12% from the previous year, notwithstanding the lower market activity characteristic of the Q1 of the year along with an increased competitive environment as Jorge just mentioned. The commercial portfolio is well diversified across countries and industries in the Latin America and Caribbean region, with top exposures to Brazil at 12% and to Mexico and Colombia at 11% each. In line with its trade focus, the portfolio continues to be short term in nature, with 73% scheduled to mature in the next 12 months and an average remaining tenor of less than 1 year. Speaker 200:07:20As shown on Slide 6, Bladex asset quality remains strong, with 97% of the CRE portfolio being classified as low risk or Stage 1 as defined by IFRS 9, while only 3% classified as Stage 2, representing credits with increased risks since origination and which were all performing. On the other hand, only a minimal 0.1% of total exposure remains classified as Stage 3 impaired credits, or NPLs, amounting to $10,000,000 with a total reserve coverage of 6.9 times. Overall, credit provision charges for the Q1 were $3,000,000 mostly reflecting the increased balance in Stage 1 exposure from commercial portfolio growth. On Slide 7, the graph on the left illustrates our funding structure, with deposits now representing 52% of the total funding, reaching over $4,700,000,000 an increase of 32% from last year and 7% from the preceding quarter. As Jorge pointed out, this significant growth reflects the combined effect of our cross selling strategy and the success of our Yankee CD program, which provides granularity to our funding base together with the continued relevant participation of our Central Bank Class A shareholders. Speaker 200:08:54These deposits are overall short term in nature, with an average original maturity of close to 5 months, representing a cost effective, recurrent and stable funding source. The bank's longer tenured funding base reached $2,800,000,000 atquarterend, representing 31% of total funding. It consists of bond issuance in the debt capital markets in the U. S, Mexico and Panama, along with private placements issued under the bank's EMTN program in different geographies as well as bilateral and syndicated facilities in the international loan market. Bladex also counts on a wide base of correspondent banks worldwide, which provide trade financing facilities with tenors of up to 1 year. Speaker 200:09:48Additionally, the Bank is also active in the issuance of short term paper in public and private format under its different debt programs. The bank's equity position presented on the right hand side continues to be enhanced by earnings generation. Our Board recently declared a $0.50 per share quarterly dividend unchanged from the preceding quarter on the back of strong financial performance. Even as we continue to grow our business and our balance sheet, we aim to maintain our capital ratios at current levels as a reflection of our internal risk appetite and in defense of our investment grade ratings. Moving now to the drivers behind net interest income evolution. Speaker 200:10:39In the following slide, we illustrate the positive trend in net interest spread, or NIS, and net interest margin, or NIM, since the beginning of our strategy execution in the Q1 of 2022. NIS, consisting of the rate differential between assets and liabilities, has shown an increasing trend, which has leveled at around 1.8% in recent quarters as expected, except for the 4Q 'twenty 3, which was positively impacted by some accrual accelerations. Higher lending spreads, efficient cost of funds driven by a higher deposit base and a proactive management of the short tenure interest rate gap stand as the main drivers of this positive NIS trend over the last couple of years. Along with higher market interest rates, these factors have also benefited the net interest margin, which has stabilized at a level close to our target of 2.5%. Market based average asset rates have increased by close to 500 basis points since the beginning of 2022, generating incremental revenues from the share of assets funded by our equity. Speaker 200:12:01Overall, higher margins along with sustained average portfolio growth have driven increased net interest income levels, which stood at $62,900,000 in the Q1 of 2024, up 20% from the same period of last year and 4% below the preceding quarter on a strong 4Q 2023 as already mentioned. Strong NII evolution reflects our successful strategy execution, particularly with regards to new client onboarding, cross selling efforts, including higher deposits from our client base and a strict emphasis on pricing, profitability and capital optimization at a transaction level. Moving on to Slide 9. Fee income has also shown a strong performance in recent quarters. It stood at $9,500,000 during the Q1 of 2024, almost double the amount from the same period of last year. Speaker 200:13:05Relative to the Q4 of 2023, fee income had a slight decrease, mainly due to lower activity in the transaction based structuring and syndications business, which was also particularly strong at year end. Letter of credit business, a pillar of our strategy, has increased to a quarterly level of close to $6,000,000 having streamlined processes that have allowed increased transactionality as well as benefiting from cross sell emphasis. Once we complete the automation phase of this key trade finance product, we should be able to further scale this important revenue stream. Jorge will comment on this later. During the Q1 of 2024, we also saw increased other fees, which relate to fee acceleration on facility prepayments, along with other opportunistic off balance sheet transactions. Speaker 200:14:05On Slide 10, seasonally lower quarterly expenses led to an improvement in the bank's efficiency, reaching a cost to income level of 25% in the Q1 of 2024, better than the 27% experienced in recent quarters. Expenses decreased by $3,200,000 or 15% with respect to the preceding quarter, which included higher performance based variable compensation due to an outstanding 2023, as well as greater activity in strategy execution. When compared to the same period of last year, quarterly expenses were up by $2,400,000 or 15% due to a higher salary base as our workforce increased by close to 50% over the last 2 years, in line with our focus on strengthening Bladex's execution capabilities as outlined in our strategic plan. With this, let me now turn the call back to Jorge. Thank you. Speaker 100:15:13Thank you very much, Anne. Great job. As we have communicated before, after 2 years of careful execution, Bladex is transitioning from the optimization phase to the expansion phase of our 5 year strategic plan. In this new phase, the focus is the enhancement of our product suite. Significant technological upgrades are needed to achieve this objective. Speaker 100:15:40In this sense, after a lengthy and very thorough vendor selection process, DICE will soon announce the selection of 2 strategic IT platforms that will enhance our product suite. One platform is related to trade finance solutions and the other one will support the treasury management space. I want to share with you the transformative impact of these new solutions in our bank. First of all, the trade finance platform will provide the operational support to significantly scale our biggest fee income generating product, letters of credit. The new platform not only has an extremely friendly client interface, but also will allow us to efficiently process a significantly higher number of transactions while minimizing manual errors as end to end processes will be refined through automation. Speaker 100:16:40Moreover, the platform will allow us to provide structured working capital solutions for our corporate clients, specifically on the buyer side on the first stage of implementation. Once the platform is up and running, we will be able to enter multiple highly transactional supply chain finance programs of existing clients and new clients at the same time. Today, we're only able to join a limited number of programs as we are forced to select only the ones that have limited transactionality. This will bring significant gains in both lending borrowings and also credit spreads, since supply chain finance programs typically command a premium over the typical direct lending facilities. Similarly, the implementation of a new IT solution for the treasury area will allow us to automate processes that are currently carried out with a high degree of manual intervention. Speaker 100:17:44We intend to implement a treasury solutions team that will offer hedging products to our clients covering risks derived from FX, interest rate and commodity price exposures. Clearly, the Treasury business has strong synergies with other initiatives that are currently being implemented at the bank. Project finance borrowers, for example, are often looking for tools to manage interest rate risk and FX risk associated with their debt. This provides an opportunity to offer interest rate or cross currency swaps. Although we have mentioned this point before, I would like to emphasize once again that these initiatives do not entail opening new risk fronts for Blythe's. Speaker 100:18:28The treasury solutions team will be offering hedging products to our clients covering risks derived from FX or interest rate exposures. Our relationship management team have identified plenty of potential opportunities, which the Bank with wide regional coverage is in a very good position to capture. I want to make one last comment regarding our guidance for the year. Even though as of today we have exceeded the profitability targets mainly due to the successful implementation of the first phase of our plan, we also recognize the positive impact of favorable market conditions in our results. Looking forward, our focus is twofold. Speaker 100:19:14First, on the execution of the expansion phase of our strategic plan and secondly, on maintaining the profitability levels we have accomplished so far. In this context, I want to reaffirm our guidance for 2024 and remain committed to achieving the objectives outlined in our plan for 2026. I will leave it there for now and open the call for questions. Operator? Operator00:19:44Thank you very much for the presentation. We will now begin the Q and A section for investors and analysts. If you wish to ask a question, please press the button, raise hand. If your question has already been answered, you can leave the queue by clicking on put hand down. There is also a possibility to ask your questions through the Q and A icon at the bottom of the screen. Operator00:20:05You may select the icon and type your question with your name and company. Written questions that are not addressed during the earnings call will be returned by the Investor Relations team. Our first question comes from Patrick Brown. Great results. Congrats. Operator00:20:28There's a slight decrease in margins this quarter. Can you further comment on this? Speaker 100:20:36Thank you, Patrick. Good question. We are seeing some pressure on credit spreads, and I'll say it's mainly for two reasons. 1 is we're seeing more liquidity, and we're also seeing, more competitions from from banks, both locally and and international banks. But I'll say that the main reason is perhaps that local and international debt capital markets are starting again to compete with our medium term, portfolio. Speaker 100:21:12Now this is not this is not new for us. Good news here is that we have a very strong pipeline of good quality syndicated deals with healthy healthy spreads, I will say, that should close in this Q2 of the year. So that should compensate. Operator00:21:35Next question also from Patrick Brown. We see a decrease in quarterly expenses related to the 4th quarter. What should we expect going forward? Speaker 100:21:48Thank you. Good question as well. This one is a little tricky because expenses are seasonally high in Q4 and particularly last Q4 and are seasonally low in Q1. I guess I'll say the average run rate that you should expect is closer to the level of Q3 in 2023. And as I mentioned before, we do expect to keep investing in transformations in the IT platforms going forward. Operator00:22:24Next question is from with Jefferies. You can activate your microphone. Speaker 300:22:35Hi, good morning. I got a couple of questions. One going back to the NIM, I mean the NIM was 2.5 in Q1, which is well in line with your target for the full year. You mentioned a bit more competition, more liquidity, interest rates, who knows, but they should come down at some point over the next 18 months. How realistic is to think 2.5 NIM, not only for this year, but for the following year, like within these moving pieces, like spreads on the core business and obviously your loan position on interest rates to the equity. Speaker 300:23:17And my second question is on OpEx. I mean, you've done a big OpEx effort already. You were talking about these solutions, which are key in the strategic plan. How big are they in terms of the OpEx effort? I mean, how much do we still need to see OpEx going up, I guess, still this year? Speaker 300:23:40And what is the lag for full monetization? So when do you think these 2 IT platforms could be fully monetized? Are we talking like 2 years, 3 years, 4 years? Thank you for that. Speaker 100:23:56Thank you. Thank you, Vinhigo. Let me start with the second question first and then the margins question. I'll turn it to Juan. So on the OpEx and the IT investments, we do expect to a gradual, let's say, implementation for both platforms to begin in the second half of this year. Speaker 100:24:22Implementations for these platforms usually takes between a year 18 months. Obviously, part of the purpose here is to generate incremental revenues to protect precisely our NIM. We expect the incremental revenues to be around 10% of total revenues by 2026. And the tools combined are about 50% of total IT investments in the next 5 years. The rest is basically cybersecurity infrastructure and other applications. Speaker 100:25:05So if you I think the correct way to look at it is in terms of average incremental IT expenses will be around 1.5% of total revenues in average going forward. I don't know if that answers your question. Speaker 300:25:26Yeah, absolutely. Absolutely. Very clear. Speaker 100:25:29Okay. And in terms of NIM, our guidance we put there assume 2 Fed cuts in the second half of the year. So who knows what's going to happen with rates as you say, but we remain committed to a net interest margin of 2.5%, given what we're seeing. Speaker 300:25:58Okay. So you think yes, so you think that the 2.5%, you can have like a bit of pressure from low interest rates in the second half, but you can offset that through a slightly higher margin on the core business. Is that right? Speaker 100:26:12Right. Core business, also in terms of deposits gaining share on funding will also help us to protect spirits Speaker 200:26:29there. Yeah. And considering, you know, that the repricing takes a while. So for this year, in our base case, we didn't see so much of an impact. Probably, if the rates do go down, it would probably see more pressure next year from lower rates. Speaker 300:26:50Perfect. Super clear. Thank you so much. Speaker 100:26:53You're welcome. Operator00:27:00Okay. Thank you very much. That's all the questions we have for today. I'll pass the line back to the Bladex team for closing remarks. Speaker 100:27:11All right. Let me just make a couple of comments before closing. We're happy, of course, with the traction that the strategic plan has. I think the results speak for themselves. I mean, non interest income has doubled since we started to execute the plan. Speaker 100:27:31And clearly, it has a potential to scale even further with the implementations of the tools I've described. I mean, deposits that you saw are growing faster than the commercial portfolio, which is, of course, helping our net interest spread. Credit quality remains pristine. And our ROE for the quarter is the highest in at least 20 years. So I mean, super happy. Speaker 100:27:59The whole team is is very clear and focused on the road map going forward and extremely committed to it. I'm going to leave it there and see you again in the next call. Thank you so much.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallBanco Latinoamericano de Comercio Exterior, S. A. Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K) Banco Latinoamericano de Comercio Exterior, S. A. Earnings HeadlinesApril 21, 2025 | gurufocus.comBladex´s First Quarter 2025 Conference CallApril 21, 2025 | prnewswire.comBlackrock’s Sending THIS Crypto Higher on PurposeWhile everyone's distracted by Bitcoin's moves, a stealth revolution is underway. One altcoin is quietly positioning itself to overthrow the entire banking system.May 5, 2025 | Crypto 101 Media (Ad)Bladex: A Trade Finance Bank During A Trade RiftApril 18, 2025 | seekingalpha.comBLADEX FILES ANNUAL REPORT ON FORM 20-FApril 15, 2025 | prnewswire.comBladex Files 2024 Annual Report with SECApril 15, 2025 | tipranks.comSee More Banco Latinoamericano de Comercio Exterior, S. A. Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Banco Latinoamericano de Comercio Exterior, S. A.? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Banco Latinoamericano de Comercio Exterior, S. A. and other key companies, straight to your email. Email Address About Banco Latinoamericano de Comercio Exterior, S. A.Banco Latinoamericano de Comercio Exterior, S. A. (NYSE:BLX), a multinational bank, primarily engages in the financing of foreign trade in Latin America and the Caribbean. The company operates in two segments, Commercial and Treasury. It offers bilateral loans; structured loans including syndicated and clubbed, such as acquisition and pre-export financing, A/B loan financing, bridge loans, and liability management; and project financing. The company also provides letter of credit comprising import and export letters of credit, and credit discounting and financing, as well as usance payable at sight; stand-by services; bank guarantees, including first demand and local guarantees; import and export documentary collection; irrevocable reimbursement undertaking; and canal tolls. In addition, it offers liquidity and investment solutions, such as time deposits, DDA accounts, Yankee certificate of deposits, and EMTN private placement services, as well as supply chain finance services. The company primarily serves financial institutions, corporations, and sovereigns and state-owned entities. Banco Latinoamericano de Comercio Exterior, S. A.was formerly known as Banco Latinoamericano de Exportaciones, S.A. and changed its name to Banco Latinoamericano de Comercio Exterior, S. A. in June 2009. The company was founded in 1975 and is headquartered in Panama City, the Republic of Panama.View Banco Latinoamericano de Comercio Exterior, S. A. ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Amazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernVisa Q2 Earnings Top Forecasts, Adds $30B Buyback PlanMicrosoft Crushes Earnings, What’s Next for MSFT Stock?Qualcomm's Earnings: 2 Reasons to Buy, 1 to Stay AwayAMD Stock Signals Strong Buy Ahead of Earnings Upcoming Earnings Palantir Technologies (5/5/2025)Vertex Pharmaceuticals (5/5/2025)Realty Income (5/5/2025)Williams Companies (5/5/2025)CRH (5/5/2025)Advanced Micro Devices (5/6/2025)American Electric Power (5/6/2025)Constellation Energy (5/6/2025)Marriott International (5/6/2025)Energy Transfer (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 4 speakers on the call. Operator00:00:00Good morning, ladies and gentlemen, and welcome to Bladex First 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. There will be an opportunity for you to ask questions at the end of today's presentation. Please note, today's conference call is being recorded. As a reminder, all participants will be in listen only mode. Operator00:00:29I would now like to turn the call over to Mr. Jorge Salas, Chief Executive Officer. Sir, please go ahead. Speaker 100:00:37Good morning, everyone, and thank you for joining to discuss our 2024 Q1 results. I will start by providing a high level summary of our performance and then Ani Mendez, our CFO, will discuss the results in more detail. After that, I'll make a couple of comments regarding key initiatives in our strategic plan, and then I will open the call for questions. 2024 had a very strong start, extending the positive profitability trend from the previous quarters. This is notable not only because Q4 had a couple of positive one off transactions, but more importantly, because we have been able to achieve these results in a more challenging landscape marked by reopening of debt capital markets, increased liquidity in domestic and global markets and also increased competition from local and international banks. Speaker 100:01:35In this context, we have managed to grow our portfolio, maintain our income generation, protect margins, increase deposits and continue generating significant fee income throughout the Q1 of the year. Moving on to Slide 2. Here we show the highlights of the Q1 results. Starting with the balance sheet, growth of the credit book was 3% quarter on quarter and 12% year on year with pristine asset quality. At the same time, deposits increased 7% quarter over quarter and 32% year on year, gaining the largest share of our funding structure. Speaker 100:02:18As a result of the continued growth on the deposit base, the bank has been tactically reducing the use of bilateral facilities from corresponding bank. This is, of course, has benefited our funding costs. Also during the Q1, Nudadex once again topped the Mexican debt capital markets with a new bond placement for MXN 3,000,000,000, equivalent to MXN 180,000,000 which is widely oversubscribed. Today, close to $1,300,000,000 almost 15% of total funding come from the Mexican market. On the P and L side, we are seeing margins stabilizing at the level we projected for the year with NIM close to 2.5%. Speaker 100:03:05Fee income, on the other hand, also had a strong quarter, led primarily by solid revenues from our letters of credit. All this led to a net income of $51,300,000 for the quarter, 11% higher than our previous record breaking Q4 and 39% higher year on year. Finally, we're excited to report 16.8% ROE for the quarter, an improvement of 126 basis points over the last quarter. I'm going to leave the highlights here for now and turn the call to Annie, our CFO, who will talk about the results in more detail. Annie? Speaker 200:03:49Thank you, Jorge. Good morning to everyone. I will now go into more detail on the financial performance during the Q1 of 2024, starting on Slide number 3. As Jorge introduced, the bank continued to improve its bottom line results, reaching net income in excess of $51,000,000 during the Q1, up by 39% from last year and 11% from the previous quarter. On the back of these strong results, the annualized return on equity reached a notable 16.8%. Speaker 200:04:23Let me now walk you through our balance sheet and profit and loss statements, underlining the main items driving this sustained exceptional performance. Moving on to Slide 4, Bladex balance sheet remained stable from the previous quarter at $10,700,000,000 up by 16% from the year before on the basis of continued growth in the loan and investment portfolio balances along with a sound liquidity position. The bank's cash position, which is mostly placed with the Federal Reserve Bank of New York, stood at $1,700,000,000 at quarter end, representing 16% of total assets and 37% of liability deposits. Our prudent liquidity management approach follows Basel Methodology's liquidity coverage ratio, as required by Panama's banking regulator. Along with strong asset quality and capitalization, a sound liquidity position represents a pillar of the Bank's investment grade ratings. Speaker 200:05:28More details on the other 2 main asset components, loans and investment securities, are presented in the following slide. The Bank's investment securities portfolio reached $1,100,000,000 at quarter end. 77% of this portfolio is placed with non LatAm issuers, mostly from the U. S, providing country risk diversification to our credit book. Furthermore, 81% is placed with investment grade issuers and is eligible to be discounted with the Federal Reserve through our New York agency, thus providing contingent liability funding. Speaker 200:06:08The average remaining tenure of the portfolio is a little over 2 years. The Bank's core business is represented by the commercial portfolio, which includes loans as well as off balance sheet items such as letters of credit and guarantees. The commercial portfolio reached $8,700,000,000 at quarter end on a continued positive growth trend, having increased by 2% from year end 2023 balances and 12% from the previous year, notwithstanding the lower market activity characteristic of the Q1 of the year along with an increased competitive environment as Jorge just mentioned. The commercial portfolio is well diversified across countries and industries in the Latin America and Caribbean region, with top exposures to Brazil at 12% and to Mexico and Colombia at 11% each. In line with its trade focus, the portfolio continues to be short term in nature, with 73% scheduled to mature in the next 12 months and an average remaining tenor of less than 1 year. Speaker 200:07:20As shown on Slide 6, Bladex asset quality remains strong, with 97% of the CRE portfolio being classified as low risk or Stage 1 as defined by IFRS 9, while only 3% classified as Stage 2, representing credits with increased risks since origination and which were all performing. On the other hand, only a minimal 0.1% of total exposure remains classified as Stage 3 impaired credits, or NPLs, amounting to $10,000,000 with a total reserve coverage of 6.9 times. Overall, credit provision charges for the Q1 were $3,000,000 mostly reflecting the increased balance in Stage 1 exposure from commercial portfolio growth. On Slide 7, the graph on the left illustrates our funding structure, with deposits now representing 52% of the total funding, reaching over $4,700,000,000 an increase of 32% from last year and 7% from the preceding quarter. As Jorge pointed out, this significant growth reflects the combined effect of our cross selling strategy and the success of our Yankee CD program, which provides granularity to our funding base together with the continued relevant participation of our Central Bank Class A shareholders. Speaker 200:08:54These deposits are overall short term in nature, with an average original maturity of close to 5 months, representing a cost effective, recurrent and stable funding source. The bank's longer tenured funding base reached $2,800,000,000 atquarterend, representing 31% of total funding. It consists of bond issuance in the debt capital markets in the U. S, Mexico and Panama, along with private placements issued under the bank's EMTN program in different geographies as well as bilateral and syndicated facilities in the international loan market. Bladex also counts on a wide base of correspondent banks worldwide, which provide trade financing facilities with tenors of up to 1 year. Speaker 200:09:48Additionally, the Bank is also active in the issuance of short term paper in public and private format under its different debt programs. The bank's equity position presented on the right hand side continues to be enhanced by earnings generation. Our Board recently declared a $0.50 per share quarterly dividend unchanged from the preceding quarter on the back of strong financial performance. Even as we continue to grow our business and our balance sheet, we aim to maintain our capital ratios at current levels as a reflection of our internal risk appetite and in defense of our investment grade ratings. Moving now to the drivers behind net interest income evolution. Speaker 200:10:39In the following slide, we illustrate the positive trend in net interest spread, or NIS, and net interest margin, or NIM, since the beginning of our strategy execution in the Q1 of 2022. NIS, consisting of the rate differential between assets and liabilities, has shown an increasing trend, which has leveled at around 1.8% in recent quarters as expected, except for the 4Q 'twenty 3, which was positively impacted by some accrual accelerations. Higher lending spreads, efficient cost of funds driven by a higher deposit base and a proactive management of the short tenure interest rate gap stand as the main drivers of this positive NIS trend over the last couple of years. Along with higher market interest rates, these factors have also benefited the net interest margin, which has stabilized at a level close to our target of 2.5%. Market based average asset rates have increased by close to 500 basis points since the beginning of 2022, generating incremental revenues from the share of assets funded by our equity. Speaker 200:12:01Overall, higher margins along with sustained average portfolio growth have driven increased net interest income levels, which stood at $62,900,000 in the Q1 of 2024, up 20% from the same period of last year and 4% below the preceding quarter on a strong 4Q 2023 as already mentioned. Strong NII evolution reflects our successful strategy execution, particularly with regards to new client onboarding, cross selling efforts, including higher deposits from our client base and a strict emphasis on pricing, profitability and capital optimization at a transaction level. Moving on to Slide 9. Fee income has also shown a strong performance in recent quarters. It stood at $9,500,000 during the Q1 of 2024, almost double the amount from the same period of last year. Speaker 200:13:05Relative to the Q4 of 2023, fee income had a slight decrease, mainly due to lower activity in the transaction based structuring and syndications business, which was also particularly strong at year end. Letter of credit business, a pillar of our strategy, has increased to a quarterly level of close to $6,000,000 having streamlined processes that have allowed increased transactionality as well as benefiting from cross sell emphasis. Once we complete the automation phase of this key trade finance product, we should be able to further scale this important revenue stream. Jorge will comment on this later. During the Q1 of 2024, we also saw increased other fees, which relate to fee acceleration on facility prepayments, along with other opportunistic off balance sheet transactions. Speaker 200:14:05On Slide 10, seasonally lower quarterly expenses led to an improvement in the bank's efficiency, reaching a cost to income level of 25% in the Q1 of 2024, better than the 27% experienced in recent quarters. Expenses decreased by $3,200,000 or 15% with respect to the preceding quarter, which included higher performance based variable compensation due to an outstanding 2023, as well as greater activity in strategy execution. When compared to the same period of last year, quarterly expenses were up by $2,400,000 or 15% due to a higher salary base as our workforce increased by close to 50% over the last 2 years, in line with our focus on strengthening Bladex's execution capabilities as outlined in our strategic plan. With this, let me now turn the call back to Jorge. Thank you. Speaker 100:15:13Thank you very much, Anne. Great job. As we have communicated before, after 2 years of careful execution, Bladex is transitioning from the optimization phase to the expansion phase of our 5 year strategic plan. In this new phase, the focus is the enhancement of our product suite. Significant technological upgrades are needed to achieve this objective. Speaker 100:15:40In this sense, after a lengthy and very thorough vendor selection process, DICE will soon announce the selection of 2 strategic IT platforms that will enhance our product suite. One platform is related to trade finance solutions and the other one will support the treasury management space. I want to share with you the transformative impact of these new solutions in our bank. First of all, the trade finance platform will provide the operational support to significantly scale our biggest fee income generating product, letters of credit. The new platform not only has an extremely friendly client interface, but also will allow us to efficiently process a significantly higher number of transactions while minimizing manual errors as end to end processes will be refined through automation. Speaker 100:16:40Moreover, the platform will allow us to provide structured working capital solutions for our corporate clients, specifically on the buyer side on the first stage of implementation. Once the platform is up and running, we will be able to enter multiple highly transactional supply chain finance programs of existing clients and new clients at the same time. Today, we're only able to join a limited number of programs as we are forced to select only the ones that have limited transactionality. This will bring significant gains in both lending borrowings and also credit spreads, since supply chain finance programs typically command a premium over the typical direct lending facilities. Similarly, the implementation of a new IT solution for the treasury area will allow us to automate processes that are currently carried out with a high degree of manual intervention. Speaker 100:17:44We intend to implement a treasury solutions team that will offer hedging products to our clients covering risks derived from FX, interest rate and commodity price exposures. Clearly, the Treasury business has strong synergies with other initiatives that are currently being implemented at the bank. Project finance borrowers, for example, are often looking for tools to manage interest rate risk and FX risk associated with their debt. This provides an opportunity to offer interest rate or cross currency swaps. Although we have mentioned this point before, I would like to emphasize once again that these initiatives do not entail opening new risk fronts for Blythe's. Speaker 100:18:28The treasury solutions team will be offering hedging products to our clients covering risks derived from FX or interest rate exposures. Our relationship management team have identified plenty of potential opportunities, which the Bank with wide regional coverage is in a very good position to capture. I want to make one last comment regarding our guidance for the year. Even though as of today we have exceeded the profitability targets mainly due to the successful implementation of the first phase of our plan, we also recognize the positive impact of favorable market conditions in our results. Looking forward, our focus is twofold. Speaker 100:19:14First, on the execution of the expansion phase of our strategic plan and secondly, on maintaining the profitability levels we have accomplished so far. In this context, I want to reaffirm our guidance for 2024 and remain committed to achieving the objectives outlined in our plan for 2026. I will leave it there for now and open the call for questions. Operator? Operator00:19:44Thank you very much for the presentation. We will now begin the Q and A section for investors and analysts. If you wish to ask a question, please press the button, raise hand. If your question has already been answered, you can leave the queue by clicking on put hand down. There is also a possibility to ask your questions through the Q and A icon at the bottom of the screen. Operator00:20:05You may select the icon and type your question with your name and company. Written questions that are not addressed during the earnings call will be returned by the Investor Relations team. Our first question comes from Patrick Brown. Great results. Congrats. Operator00:20:28There's a slight decrease in margins this quarter. Can you further comment on this? Speaker 100:20:36Thank you, Patrick. Good question. We are seeing some pressure on credit spreads, and I'll say it's mainly for two reasons. 1 is we're seeing more liquidity, and we're also seeing, more competitions from from banks, both locally and and international banks. But I'll say that the main reason is perhaps that local and international debt capital markets are starting again to compete with our medium term, portfolio. Speaker 100:21:12Now this is not this is not new for us. Good news here is that we have a very strong pipeline of good quality syndicated deals with healthy healthy spreads, I will say, that should close in this Q2 of the year. So that should compensate. Operator00:21:35Next question also from Patrick Brown. We see a decrease in quarterly expenses related to the 4th quarter. What should we expect going forward? Speaker 100:21:48Thank you. Good question as well. This one is a little tricky because expenses are seasonally high in Q4 and particularly last Q4 and are seasonally low in Q1. I guess I'll say the average run rate that you should expect is closer to the level of Q3 in 2023. And as I mentioned before, we do expect to keep investing in transformations in the IT platforms going forward. Operator00:22:24Next question is from with Jefferies. You can activate your microphone. Speaker 300:22:35Hi, good morning. I got a couple of questions. One going back to the NIM, I mean the NIM was 2.5 in Q1, which is well in line with your target for the full year. You mentioned a bit more competition, more liquidity, interest rates, who knows, but they should come down at some point over the next 18 months. How realistic is to think 2.5 NIM, not only for this year, but for the following year, like within these moving pieces, like spreads on the core business and obviously your loan position on interest rates to the equity. Speaker 300:23:17And my second question is on OpEx. I mean, you've done a big OpEx effort already. You were talking about these solutions, which are key in the strategic plan. How big are they in terms of the OpEx effort? I mean, how much do we still need to see OpEx going up, I guess, still this year? Speaker 300:23:40And what is the lag for full monetization? So when do you think these 2 IT platforms could be fully monetized? Are we talking like 2 years, 3 years, 4 years? Thank you for that. Speaker 100:23:56Thank you. Thank you, Vinhigo. Let me start with the second question first and then the margins question. I'll turn it to Juan. So on the OpEx and the IT investments, we do expect to a gradual, let's say, implementation for both platforms to begin in the second half of this year. Speaker 100:24:22Implementations for these platforms usually takes between a year 18 months. Obviously, part of the purpose here is to generate incremental revenues to protect precisely our NIM. We expect the incremental revenues to be around 10% of total revenues by 2026. And the tools combined are about 50% of total IT investments in the next 5 years. The rest is basically cybersecurity infrastructure and other applications. Speaker 100:25:05So if you I think the correct way to look at it is in terms of average incremental IT expenses will be around 1.5% of total revenues in average going forward. I don't know if that answers your question. Speaker 300:25:26Yeah, absolutely. Absolutely. Very clear. Speaker 100:25:29Okay. And in terms of NIM, our guidance we put there assume 2 Fed cuts in the second half of the year. So who knows what's going to happen with rates as you say, but we remain committed to a net interest margin of 2.5%, given what we're seeing. Speaker 300:25:58Okay. So you think yes, so you think that the 2.5%, you can have like a bit of pressure from low interest rates in the second half, but you can offset that through a slightly higher margin on the core business. Is that right? Speaker 100:26:12Right. Core business, also in terms of deposits gaining share on funding will also help us to protect spirits Speaker 200:26:29there. Yeah. And considering, you know, that the repricing takes a while. So for this year, in our base case, we didn't see so much of an impact. Probably, if the rates do go down, it would probably see more pressure next year from lower rates. Speaker 300:26:50Perfect. Super clear. Thank you so much. Speaker 100:26:53You're welcome. Operator00:27:00Okay. Thank you very much. That's all the questions we have for today. I'll pass the line back to the Bladex team for closing remarks. Speaker 100:27:11All right. Let me just make a couple of comments before closing. We're happy, of course, with the traction that the strategic plan has. I think the results speak for themselves. I mean, non interest income has doubled since we started to execute the plan. Speaker 100:27:31And clearly, it has a potential to scale even further with the implementations of the tools I've described. I mean, deposits that you saw are growing faster than the commercial portfolio, which is, of course, helping our net interest spread. Credit quality remains pristine. And our ROE for the quarter is the highest in at least 20 years. So I mean, super happy. Speaker 100:27:59The whole team is is very clear and focused on the road map going forward and extremely committed to it. I'm going to leave it there and see you again in the next call. Thank you so much.Read morePowered by