PANAMA CITY, July 19, 2019 /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 ("2Q19") and six
months ("6M19") ended June 30,
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)
|
6M19
|
6M18
|
2Q19
|
1Q19
|
2Q18
|
Key Income
Statement Highlights
|
|
|
|
|
|
Net Interest Income
("NII")
|
$56.0
|
$54.5
|
$27.9
|
$28.0
|
$27.9
|
Fees and commissions,
net
|
$7.5
|
$8.1
|
$5.1
|
$2.4
|
$5.0
|
Total
revenues
|
$65.7
|
$63.4
|
$33.6
|
$32.1
|
$32.7
|
Impairment loss on
financial instruments
|
($1.8)
|
($3.7)
|
($0.8)
|
($0.9)
|
($1.8)
|
Impairment loss on
non-financial assets
|
$0.0
|
($2.9)
|
$0.0
|
$0.0
|
($2.9)
|
Operating
expenses
|
($20.4)
|
($25.7)
|
($10.6)
|
($9.9)
|
($11.4)
|
Profit for the
period
|
$43.5
|
$31.1
|
$22.3
|
$21.2
|
$16.6
|
Profitability
Ratios
|
|
|
|
|
|
Earnings per Share
("EPS") (1)
|
$1.10
|
$0.79
|
$0.56
|
$0.54
|
$0.42
|
Return on Average
Equity ("ROAE")(2)
|
8.8%
|
6.0%
|
9.0%
|
8.6%
|
6.4%
|
Return on Average
Assets ("ROAA")
|
1.37%
|
0.99%
|
1.43%
|
1.31%
|
1.07%
|
Net Interest Margin
("NIM")(3)
|
1.77%
|
1.75%
|
1.81%
|
1.74%
|
1.81%
|
Net Interest Spread
("NIS")(4)
|
1.19%
|
1.29%
|
1.22%
|
1.16%
|
1.31%
|
Efficiency
Ratio(5)
|
31.1%
|
40.5%
|
31.4%
|
30.8%
|
34.8%
|
Assets, Capital,
Liquidity & Credit
Quality
|
|
|
|
|
|
Commercial
Portfolio(6)
|
$6,209
|
$6,054
|
$6,209
|
$6,006
|
$6,054
|
Investment
Portfolio
|
$88
|
$94
|
$88
|
$90
|
$94
|
Total
assets
|
$6,576
|
$6,331
|
$6,576
|
$6,450
|
$6,331
|
Total
equity
|
$1,003
|
$1,047
|
$1,003
|
$997
|
$1,047
|
Market
capitalization(7)
|
$825
|
$975
|
$825
|
$788
|
$975
|
Tier 1 Basel III
Capital Ratio (8)
|
20.4%
|
20.0%
|
20.4%
|
20.1%
|
20.0%
|
Total assets / Total
equity (times)
|
6.6
|
6.0
|
6.6
|
6.5
|
6.0
|
Liquid Assets / Total
Assets (9)
|
12.8%
|
10.3%
|
12.8%
|
11.9%
|
10.3%
|
Credit-impaired loans
to Loan Portfolio(10)
|
1.16%
|
0.98%
|
1.16%
|
1.18%
|
0.98%
|
Total allowance for
losses to Commercial
Portfolio(11)
|
1.70%
|
1.44%
|
1.70%
|
1.75%
|
1.44%
|
Total allowance for
losses to credit-
impaired loans (times)(11)
|
1.6
|
1.6
|
1.6
|
1.6
|
1.6
|
2Q19 & 6M19 Highlights
- Bladex reported a profit of $22.3
million in 2Q19, a 34% increase YoY as a result of the
Bank's improved top line revenues, decreased impairment losses and
lower operating expenses. The 5% profit improvement QoQ was mainly
driven by higher fees and commissions, while maintaining a stable
Net Interest Income ("NII").
- The Bank's profits for the 6M19 of $43.5
million resulted on a 40% yearly increase mostly
attributable to higher top line revenues and improved efficiency,
along with lower impairment losses on financial instruments and
other assets.
- NII of $27.9 million for the 2Q19
remained stable QoQ, with Net Interest Margin ("NIM") of 1.81% (+7
bps), on lower average funding costs and a better mix of
interest-earning assets. NII and NIM for 6M19 reached
$56.0 million and 1.77%, a 3% and 2
bps increase YoY, respectively, mainly on the net positive effect
from the repricing of higher average LIBOR-based market rates.
- Fees and commissions income totaled $5.1
million in 2Q19 (+118% QoQ; +2% YoY), reaching to
$7.5 million for the 6M19 (-8% YoY).
The Bank successfully closed two syndicated transactions during
2Q19, while the letters of credit kept a steady pace of quarterly
fee income.
- Operating expenses decreased 20% YoY to $20.4 million in 6M19, mainly due to lower
variable compensation expenses and restructuring charges. 2Q19
operating expenses were $10.6
million, +7% QoQ due to business-related expenses, and -7%
YoY on lower salaries and other expenses. Efficiency Ratio stood at
31% for both the 2Q19 (stable QoQ; -4 pts YoY) and 6M19 (-10 pts
YoY).
- 2Q19 and 6M19 annualized Return on Average Equity ("ROAE")
increased to 9.0% and 8.8%, respectively, while the Bank's
capitalization remained solid with a Tier 1 Basel III Capital Ratio
at 20.4%.
- Credit-impaired Loans, also referred as Non-Performing Loans or
NPLs, remained stable QoQ at $64.7
million, representing 1.16% of total Loan Portfolio
balances, a 2 bps decrease QoQ on higher lending balances at the
end of 2Q19. This compares to $54.3
million, or 0.98%, at the end of 2Q18. The total
allowance for losses remained at 1.6 times NPL balances for each
period.
- End-of-period Commercial Portfolio balances increased 3% QoQ
and YoY to reach $6.2 billion at the
end of 2Q19. Average balances were $6.0 billion for the 2Q19 (-1% QoQ; +3% YoY) and
6M19 (+2% YoY).
CEO's Comments
Mr. N. Gabriel Tolchinsky,
Bladex's Chief Executive Officer said, "In the second quarter
the Federal Reserve began to set the stage for lower interest rates
in the second half of the year. The prospect of lower rates
inverted the US dollar yield curve – a harbinger of economic
recession, which usually weakens the US dollar. Nevertheless,
further growth deceleration in both Europe and China continues to make the US dollar
attractive, thereby reducing fund flows to emerging markets in
general, and Latin America, in
particular.
With lower fund flows to Latin
America, sagging investment in key countries has become a
drag on the Region´s economic growth. Bladex´s growth
expectation for 2019 is now closer to the 1% range for Latin
America. Our adjustments to economic growth are primarily
driven by lower investment, the prospect of diminishing trade
volumes, the weight of lower growth rates from developed markets,
as well as political uncertainty in key countries.
As such, we continue to believe that the current
macroeconomic context offers no room for complacency, and we adjust
our portfolio accordingly. To summarize, Bladex continues to
perform in the following areas:
- Originating new loans at higher lending spreads than
maturities and with a solid pipeline of syndicated and structured
transactions.
- Increasing deposits, particularly from our Class A
shareholders, improving our cost of funds.
- Keeping expenses under control.
- Maintaining our credit impaired loans unchanged.
- Improving our credit reserve coverage and strong Tier I
capital ratio.
Against this backdrop, the management of Bladex - as well as
its Board of Directors - are cautiously optimistic for the second
half of 2019 and look for a continuation of the profitability path
we embarked on in the last two 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
second quarter 2019. The dividend will be paid on
August 14, 2019, to shareholders
registered as of July 30, 2019.
- Other Corporate actions:
- Due to the passing of its Director and Chairman, Mr.
Gonzalo Menendez Duque on
June 29, 2019, the Board appointed
Mr. Miguel Heras Castro, as the new
Chairman on July 16, 2019. Mr.
Heras has been serving as Director of the Bank, representing Class
E shareholders, since 2015 and is a member of the Finance and
Business Committee, the Compliance and Anti-Money Laundering
Committee and the Risk Policy and Assessment Committee, of which he
became the Chairman in 2017.
- With the aim of furthering Board's independence, in line with
best market and corporate governance practices, Mr. N. Gabriel Tolchinsky has stepped down as Director
of the Bank, representing All Classes of shareholders, on
July 16, 2019 and will continue to
serve the Bank in his capacity as Chief Executive Officer.
- The Board has appointed Ms. Isela
Costantini as new Director, representing All Classes of
shareholders, replacing Mr. Tolchinsky in this capacity for the
remainder of the term, which expires on April 2021. Ms. Costantini's appointment follows
a thorough selection process conducted by the Compensation
Committee of the Board, which started last year, involving several
other candidates.
- Ratings updates: On July 3,
2019, Fitch Ratings affirmed the Bladex's long- and
short-term foreign currency Issuer Default Rating ("IDR") at
"BBB+/F2", respectively. The outlook was revised to
"Negative" from "Stable" on Fitch Ratings' view that the Bank's
profile could potentially be affected by the ongoing strategic
initiatives to contain the challenging conditions in its main
markets and products.
- Annual Shareholders' Meeting Results: At the
Annual Shareholders' Meeting held on April
17, 2019, in Panama City,
Panama, shareholders:
- Approved the Bank's audited consolidated financial statements
for the fiscal year ended December 31,
2018.
- Ratified the appointment of KPMG as the Bank's independent
registered public accounting firm for the fiscal year ending
December 31, 2019.
- Re-elected Mr. João Carlos de Nóbrega Pecego as Director
representing Class "A" shares of the Bank's common stock, and
Messrs. Ricardo Manuel Arango,
Herminio A. Blanco and Roland Holst as Directors representing Class "E"
shares of the Bank's common stock.
- Approved, on an advisory basis, the compensation of the Bank's
executive officers.
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 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 "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.
- Market capitalization corresponds to total outstanding common
shares multiplied by market close price at the end of each
corresponding period.
- 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.
- 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.
- 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.
- 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, Peru,
and the United States of America,
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, July 19, 2019 at
11:00 a.m. New York City time (Eastern Standard
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: 62357689.
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)