BLADEX ANNOUNCES IMPROVED PROFITABILITY, WITH PROFIT FOR THE SECOND QUARTER 2022 OF $23.0 MILLION, OR $0.63 PER SHARE, AND AN ANNUALIZED RETURN ON EQUITY OF 9.1%

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

Aug 03, 2022, 17:30 ET

PANAMA CITY, Aug. 3, 2022 /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 Second Quarter ("2Q22") and six months ("6M22") ended June 30, 2022.

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)	2Q22	1Q22	2Q21	6M22	6M21
Key Income Statement Highlights
Net Interest Income ("NII")	$32.7	$25.7	$21.0	$58.4	$39.9
Fees and commissions, net	$4.3	$3.9	$4.3	$8.2	$7.3
(Loss) gain on financial instruments, net	($0.1)	$0.6	$0.2	$0.5	$0.2
Other income, net	$0.0	$0.0	$0.1	$0.0	$0.2
Total revenues	$36.9	$30.2	$25.6	$67.2	$47.6
Provision for credit losses	($0.8)	($8.1)	($1.4)	($8.9)	($1.4)
Operating expenses	($13.1)	($11.0)	($10.1)	($24.1)	($19.3)
Profit for the period	$23.0	$11.1	$14.1	$34.1	$26.9
Profitability Ratios
Earnings per Share ("EPS") ⁽¹⁾	$0.63	$0.31	$0.36	$0.94	$0.68
Return on Average Equity ("ROAE")⁽²⁾	9.1 %	4.5 %	5.4 %	6.8 %	5.2 %
Return on Average Assets ("ROAA")	1.1 %	0.6 %	0.8 %	0.8 %	0.8 %
Net Interest Margin ("NIM")⁽³⁾	1.54 %	1.32 %	1.27 %	1.43 %	1.26 %
Net Interest Spread ("NIS")⁽⁴⁾	1.32 %	1.15 %	1.11 %	1.24 %	1.08 %
Efficiency Ratio⁽⁵⁾	35.4 %	36.4 %	39.6 %	35.9 %	40.5 %
Assets, Capital, Liquidity & Credit Quality
Credit Portfolio⁽⁶⁾	$8,685	$8,412	$6,531	$8,685	$6,531
Commercial Portfolio⁽⁷⁾	$7,583	$7,321	$6,008	$7,583	$6,008
Investment Portfolio	$1,102	$1,091	$523	$1,102	$523
Total assets	$8,925	$8,458	$6,723	$8,925	$6,723
Total equity	$1,019	$1,005	$1,031	$1,019	$1,031
Market capitalization⁽⁸⁾	$482	$565	$605	$482	$605
Tier 1 Capital to risk-weighted assets (Basel III – IRB) ⁽⁹⁾	15.1 %	16.2 %	23.6 %	15.1 %	23.6 %
Capital Adequacy Ratio (Regulatory) ⁽¹⁰⁾	12.9 %	13.4 %	18.2 %	12.9 %	18.2 %
Total assets / Total equity (times)	8.8	8.4	6.5	8.8	6.5
Liquid Assets / Total Assets ⁽¹¹⁾	10.6 %	9.2 %	14.9 %	10.6 %	14.9 %
Credit-impaired loans to Loan Portfolio⁽¹²⁾	0.2 %	0.2 %	0.2 %	0.2 %	0.2 %
Total allowance for losses to Credit Portfolio⁽¹³⁾	0.6 %	0.7 %	0.7 %	0.6 %	0.7 %
Total allowance for losses to credit-impaired loans (times)⁽¹³⁾	5.3	5.2	4.4	5.3	4.4

BUSINESS HIGHLIGHTS

Bladex's Profits totaled $23.0 million for the 2Q22 (+107% QoQ; +63% YoY), reaching $34.1 million for the first 6M22 (+27% YoY), mostly driven by improved top-line revenues of Net Interest Income ("NII") and a positive trend in fee income, along with lower credit provision requirements in 2Q22, greatly offsetting increased operating expenses.
NII continued its growth trend of five consecutive quarters, to reach $32.7 million for 2Q22 (+27% QoQ; +56% YoY), and up 46% to $58.4 million for the first 6M22, mainly resulting from the effect of higher average net lending rates and volumes. Net Interest Margin ("NIM") increased to 1.54% in 2Q22 (+22 bps QoQ; +27 bps YoY) and 1.43% (+17 bps YoY), on enhanced credit spreads and higher market rates.
Fees and Commissions, net, totaled $4.3 million in 2Q22 (+8% QoQ; unchanged YoY) and $8.2 million for the first 6M22 (+12% YoY), mostly driven by the sustained growth trend performance in fees from the letters of credit business, and recovered loan syndications activity.
Efficiency Ratio improved to 35% in 2Q22 and 36% in 6M22, as higher revenues more than offset the increase in operating expenses, mostly associated to higher personnel expenses due to the strengthening of the Bank's work force and a new variable compensation structure, and other expenses mostly related to the Bank's strategy implementation.
The Bank's Credit Portfolio increased 3% QoQ and 33% YoY, to reach a new record level of $8.7 billion as of June 30, 2022, driven by the Commercial Portfolio's growth trend of eight consecutive quarters, which also resulted in a record level of $7.6 billion (+4% QoQ; +26% YoY), along with increased credit investment securities to $1.0 billion (+4% QoQ; +3x YoY), aimed to diversify exposures and complement the Bank's commercial activities.
Sustained positive trend in Commercial Portfolio's growth reflecting both stronger demand from the Bank's traditional client base, boosted by higher commodity prices and trade flows in the Region, as well as new underlying business and clients.
Preservation of asset quality, characterized by the high quality of its borrower base. Credit-impaired loans (Non-Performing or "NPLs") remain unchanged at $11 million or 0.2% of total Loan Portfolio as of June 30, 2022.
As of June 30, 2022, the total allowance for credit losses represented 0.6% of total Credit Portfolio, and 5.3 times NPL balances. Provisions for credit losses of $0.8 million in 2Q22 and $8.9 million in 6M22 were closely tied to the Bank's Credit Portfolio growth, partly offset by lower IFRS 9 Stage 2 exposure and its related allocated provisions.
Bladex´s liquidity position, consisting of cash and due from banks and highly rated corporate debt securities ('A-' or above), stood at $945 million, or 11% of total assets as of June 30, 2022. The Bank relies on sustained deposit levels and well diversified funding sources with ample access to global debt and capital markets.
2Q22 Annualized Return on Average Equity ("ROAE") reached 9.1%, on improved profitability and a more efficient use of capital. As of June 30, 2022, the Bank´s Tier 1 Basel III Capital and Regulatory Capital Adequacy Ratios stood at 15.1% and 12.9%, respectively, well above international standards and regulatory minimums.

CEO's Comments

Mr. Jorge Salas, Bladex's Chief Executive Officer said: "We delivered a strong set of operating and financial results, with our credit book maintaining the growth momentum shown in the prior quarter reaching a historical high of $8.7 billion dollars at quarter-end. At the same time, we continued to expand margins for the fifth consecutive quarter, expanding net income over 60% year-on-year to $23 million, while maintaining robust asset quality with NPLs at 0% for over two years now.

This good performance reflects the execution of the strategic plan we have been implementing for the last year with active participation of our board of directors, aimed at enhancing Bladex´s profitability, long-term sustainability, and stakeholder value creation. In particular, our plan is centered in expanding our customer and product base, extending loan duration and focusing on higher margin sectors and geographies. As we continue to build on our capabilities, we are also benefiting from the current environment of high inflation, tightening of global financial conditions and rising interest rates. In sum, we are building a stronger foundation to capitalize on the competitive advantages of Bladex as a unique and well-positioned trade bank focused on Latin America."

RECENT EVENTS

Quarterly dividend payment: The Board approved a quarterly common dividend of $0.25 per share corresponding to the second quarter 2022. The cash dividend will be paid on August 30, 2022, to shareholders registered as of August 15, 2022.
Ratings updates: On May 24, 2022, S&P Global Ratings affirmed the Bank's global issuer credit ratings at "BBB/A-2". The outlook remains "Stable".

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.
ROAE refers to return on average stockholders' equity which is calculated on the basis of 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.
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 Thursday, August 4, 2022 at 11:00 a.m. New York City time (Eastern Time). For those interested in participating, please dial +1 888 686-3653 in the United States or, if outside the United States, +1 718 866-4614. Participants should use conference passcode 877068, 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 one hour after its conclusion.

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: [email protected]

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