Banco Latinoamericano de Comercio Exterior Q1 Earnings Call Highlights

Key Points

• Balance-sheet momentum: Commercial portfolio reached $12.0 billion (up 8% QoQ, 13% YoY) and deposits hit a record $7.3 billion (up 11% sequentially, 25% YoY), aided by Yankee CDs above $1.7 billion.
• Profitability and margin resilience: Net income was $56.4 million (up 9% YoY) with net interest income of $70 million and a net interest margin of 2.34%; management reaffirmed 2026 guidance with margins expected around 2.30%.
• Strong credit and capital position: Credit quality remains solid despite a proactive increase in Stage 2 to 2.2% (~$300 million); allowances were $112 million, Basel III Tier 1 ratio rose to 17.9% while Panama's regulatory ratio was 14.7%.

Banco Latinoamericano de Comercio Exterior NYSE: BLX opened 2026 with what management described as a “very strong quarter” for balance sheet growth while maintaining profitability despite a competitive lending environment and tighter spreads across Latin America.

On the company’s first-quarter 2026 earnings call, CEO Jorge Salas said the commercial portfolio reached a record $12.0 billion, up 8% quarter-over-quarter and 13% year-over-year, driven mainly by medium-term transactions in Colombia, Brazil, and Guatemala. Deposits also hit a record $7.3 billion, up 11% sequentially and 25% year-over-year, as the bank expanded funding across depositor segments, including growth in Yankee certificates of deposit that surpassed $1.7 billion.

Quarterly results: net income up year-over-year, margins steady

CFO Annette van Hoorde de Solís reported net income of $56.4 million, up 9% year-over-year and “broadly stable” versus the prior quarter. Return on adjusted equity was 14.2%, in line with the previous quarter and within the company’s 2026 guidance range, while return on average assets was 1.8%.

Net interest income totaled $70 million, which Salas said was slightly lower as the balance sheet absorbed the repricing effects of interest rate cuts implemented in late 2025. Net interest margin was 2.34%, which management attributed to disciplined balance sheet management, deposit growth, and liquidity actions that helped offset pressure from competition and ample market liquidity.

During Q&A, van Hoorde de Solís reiterated that the bank remained comfortable with its 2026 margin outlook, stating guidance “will remain around 2.30%.” She added that incremental balance growth occurred toward the end of the quarter, meaning the earnings impact was only partially reflected in first-quarter net interest income, with a fuller contribution expected in subsequent quarters.

Fees rise despite typical first-quarter seasonality

Fee and commission income totaled $13.1 million, up 24% year-over-year, despite management characterizing the first quarter as seasonally softer for its main fee businesses. Letters of credit and guarantees generated $7.4 million in the quarter. Credit commitments and other commissions reached $2.7 million, which the CFO said more than doubled from the same period last year, reflecting the growing role of medium-term transactions and committed facilities.

Chief Commercial Officer Samuel Canineu explained that growth in commitment fees was tied to the expansion of project finance, infrastructure, and syndicated loan activity, where facilities are often drawn over time rather than immediately. He said commitment fees “tend to be 30% to 40% of the loan margin.” Canineu also emphasized the bank’s commitment exposures are not “liquidity backstop facilities,” which he said the bank does not prefer because they can be drawn when underlying credit deteriorates.

Structuring and distribution fees totaled $3.1 million, supported by two transactions in Costa Rica and Colombia, though management noted some closings shifted from the first quarter into the second.

Addressing analyst questions about sustainability, Salas said there were no one-offs behind the year-over-year fee increase. He described recent shifts between quarters as timing effects and said the bank was “confident with the guidance on fees,” arguing that fees are becoming a more structural component of revenue over time.

Asset quality: Stage 2 increase tied to proactive monitoring

Management said credit quality remained strong. Van Hoorde de Solís reported total credit exposure of $13.5 billion, with 97.5% in Stage 1, 2.2% in Stage 2 (about $300 million), and 0.3% in Stage 3 (about $39 million). Total allowances were $112 million, with a coverage ratio of 0.83%, and coverage of impaired credits at 2.9x.

Asked about the sequential increase in Stage 2 exposures, Salas said management was “not worried,” describing the move as a proactive step rather than deterioration. He said the change reflected increased caution on selected exposures, “basically in Brazil,” and that the bank expected normalization rather than further deterioration. Van Hoorde de Solís added that no material credit events were recorded during the quarter.

Capital and funding: Basel III ratio rises; Panama ratio reflects growth

Bladex ended the quarter with a Basel III Tier 1 ratio of 17.9%, up from 17.4% at year-end 2025. Van Hoorde de Solís said the increase was driven mainly by lower risk-weighted asset intensity and the regular revision of internal risk parameters based on strong historical credit performance. She also cited an Ecuador country upgrade during the quarter as a factor that impacted the Basel III ratio.

Under Panama’s regulatory framework, the capital adequacy ratio was 14.7%. In response to investor questions about the differences between the ratios, van Hoorde de Solís said the Panamanian calculation is more standardized and does not reflect improvements in risk profile in the same way Basel III does, particularly for cross-border corporate exposure. She said the quarter’s decline in the Panamanian ratio was “directly” tied to balance sheet growth of about 8% from the fourth quarter to the first quarter.

Looking ahead, management said it expects the Basel III Tier 1 ratio to “gradually” move toward the company’s 15% to 16% guidance range as capital is deployed.

On the funding side, van Hoorde de Solís emphasized that deposits represented 63% of total funding, supported by growth across corporates, financial institutions, and multilateral clients, with Class A shareholder deposits providing what she called a stable anchor. Beyond deposits, the bank executed an additional tranche under a Middle Eastern syndicated loan and completed a roughly $250 million issuance in the Mexican market that was swapped into U.S. dollars “at a cost well within” its U.S. dollar curve.

Strategy and outlook: platform execution, macro resilience, and guidance reaffirmed

Salas highlighted progress on the bank’s letters of credit platform, saying processing time improved from “almost five hours to about one hour per transaction,” enabling the bank to handle smaller ticket sizes profitably. He also said transactional deposits are a key strategic priority and noted the bank onboarded its first correspondent banking client in a pilot phase and is working on a second, with governance in place to add more during the year.

On macro conditions, Salas said Latin America has been resilient amid global geopolitical and financial volatility, in part because the region’s direct trade exposure with the Persian Gulf is limited and the region is a net commodity exporter. He said higher commodity prices are historically beneficial for Bladex, while noting that net commodity importers in Central America and the Caribbean could face headwinds.

In Q&A, Canineu said the bank’s roughly 18% exposure to oil and gas was “much more of a tailwind rather than a headwind” on a net basis, citing stronger conditions for low-cost regional producers and larger trade finance cargo sizes. He acknowledged potential inflation and profitability pressures for importers in Central America, but said the bank is generally dealing with national oil companies in “very solid countries.”

Salas also said Venezuela could represent an upside scenario, but is not included in current projections. He said Bladex’s exposure to Venezuela is currently zero, compared with a historical range of roughly 4% to 5% of the portfolio, and that returning would be a matter of timing as the bank assesses risks and opportunities.

Management reaffirmed its full-year 2026 guidance, with Salas saying the first quarter was consistent with expectations and the bank remains focused on disciplined execution despite competitive pressures.

About Banco Latinoamericano de Comercio Exterior NYSE: BLX

Banco Latinoamericano de Comercio Exterior SA, commonly known as BLADEx and traded on the New York Stock Exchange under the symbol BLX, is a multilateral financial institution dedicated to promoting foreign trade and regional integration in Latin America and the Caribbean. Headquartered in Panama City, the bank provides specialized trade finance solutions to corporate clients and financial institutions, helping to facilitate cross-border transactions across key markets in the region. Its services encompass import and export financing, supply chain solutions, project and structured finance, as well as treasury and risk management products.

Established in 1977 by a consortium of 20 Latin American and Caribbean governments in partnership with the Inter-American Development Bank (IDB), BLADEx has a mandate to support economic development through trade facilitation.

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