BLADEX ANNOUNCES THIRD QUARTER 2021 PROFIT OF $15.7 MILLION, OR $0.41 PER SHARE,

ON THE ACCOUNT OF HIGHER TOP-LINE REVENUES AND SUSTAINED CREDIT GROWTH

PANAMA CITY, REPUBLIC OF PANAMA, October 29, 2021

BUSINESS HIGHLIGHTS

Banco Latinoamericano de Comercio Exterior, S.A. (NYSE: BLX, "Bladex", or "the Bank"), a Panama-basedmultinational bank originally established by the central banks of 23 Latin-Americanand Caribbean countries to promote foreign trade and economic integration in the Region, today announced its results for the Third Quarter ("3Q21") and nine months ("9M21") ended September 30, 2021.

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

3Q21

2Q21

3Q20

9M21

9M20

amounts)

Key Income Statement Highlights

Net Interest Income ("NII")

$22.1

$21.0

$22.6

$62.0

$70.1

Fees and commissions, net

$4.8

$4.3

$2.6

$12.1

$7.6

(Loss) gain on financial instruments, net

($0.1)

$0.2

($0.4)

$0.1

($4.7)

Other income, net

$0.1

$0.1

$0.4

$0.3

$0.8

Total revenues

$26.8

$25.6

$25.2

$74.4

$73.8

(Provision for) reversal of credit losses

($0.8)

($1.4)

($1.5)

($2.2)

$1.2

Gain on non-financial assets, net

$0.0

$0.0

$0.1

$0.0

$0.0

Operating expenses

($10.3)

($10.1)

($8.3)

($29.6)

($27.2)

Profit for the period

$15.7

$14.1

$15.4

$42.6

$47.9

Profitability Ratios

Earnings per Share ("EPS") (1)

$0.41

$0.36

$0.39

$1.08

$1.21

Return on Average Equity ("ROAE") (2)

6.1%

5.4%

6.0%

5.5%

6.2%

Return on Average Assets ("ROAA")

0.9%

0.8%

1.0%

0.9%

1.0%

Net Interest Margin ("NIM") (3)

1.33%

1.27%

1.42%

1.28%

1.43%

Net Interest Spread ("NIS") (4)

1.17%

1.11%

1.19%

1.11%

1.12%

Efficiency Ratio (5)

38.5%

39.6%

33.1%

39.8%

36.8%

Assets, Capital, Liquidity & Credit

Quality

Credit Portfolio (6)

$6,956

$6,531

$5,320

$6,956

$5,320

Commercial Portfolio (7)

$6,188

$6,008

$5,087

$6,188

$5,087

Investment Portfolio

$768

$523

$234

$768

$234

Total assets

$6,977

$6,723

$6,311

$6,977

$6,311

Total equity

$1,013

$1,031

$1,026

$1,013

$1,026

Market capitalization (8)

$667

$605

$482

$667

$482

Tier 1 Capital to risk-weighted assets

21.3%

23.6%

26.5%

21.3%

26.5%

(Basel III - IRB) (9)

Capital Adequacy Ratio (Regulatory) (10)

16.9%

18.2%

21.8%

16.9%

21.8%

Total assets / Total equity (times)

6.9

6.5

6.2

6.9

6.2

Liquid Assets / Total Assets (11)

11.9%

14.9%

23.2%

11.9%

23.2%

Credit-impaired loans to Loan

0.2%

0.2%

0.0%

0.2%

0.0%

Portfolio (12)

Total allowance for losses to Credit

0.7%

0.7%

0.8%

0.7%

0.8%

Portfolio (13)

Total allowance for losses to credit-

4.4

4.4

n.m.

4.4

n.m.

impaired loans (times) (13)

"n.m." means not meaningful.

  • Bladex's Profit for 3Q21 totaled $15.7 million (+12% QoQ; +2% YoY), mainly due to higher top-line revenues (+5% QoQ; +7% YoY), on improved fee income and a positive quarterly trend in Net Interest
    Income ("NII").
  • The Bank's Profit for 9M21 reached $42.6 million (-11% YoY), mainly due to the net effect on NII of lower market rates on the Bank´s assets and liabilities. Other impacts included credit provisions mainly associated to credit growth compared to reversals in 2020, and higher operating expenses, offsetting higher fees and other income.
  • NII quarterly growth trend, up 5% QoQ, to $22.1 million for 3Q21, mainly reflect increased credit portfolio balances, higher lending spreads and lower funding costs, offsetting the impact of lower market rates, mostly accountable for the 2% YoY decrease on NII.
  • Fees and commissions income totaled $4.8 million for 3Q21 (+11% QoQ; +82% YoY), as the Bank saw increased activity in its transaction-based structuring and syndications business and the robust results in the
    Bank's letters of credit business.
  • The Bank's Credit Portfolio grew 7% QoQ and 31% YoY to reach $7.0 billion at the end of 3Q21, propelled by higher lending origination (+10% QoQ; +53% YoY) and a 78% QoQ increase in its portfolio of credit investment securities to complement the Bank's lending business.
  • The persistent quarterly growth trend in the Commercial Portfolio, reaching $6.2 billion at 3Q21 (+3% QoQ; +22% YoY), was centered on Investment Grade countries (+3 p.p. QoQ). The Bank continues to collect all scheduled loan maturities, evidencing the high quality of its borrower base, as well as the short-term nature of its business (77% maturing in less than a year).
  • Credit-impairedloans ("NPLs") remained unchanged from the previous quarter, at $11 million or 0.2% of total loans at the end of 3Q21. Credits with increased risk since origination (Stage 2, under IFRS 9) represented 3%, with the remaining 97% categorized as Stage 1 or low-risk credits.
  • As of September 30, 2021, the total allowance for credit losses amounted to $46.9 million, representing 4.4 times NPL balances. Provision for credit losses of $0.8 million in 3Q21 was mostly associated to credit growth.
  • Bladex´s liquidity position stood at $827 million, or 12% of total assets as of September 30, 2021, supported by its sound and well diversified funding structure, led by the continued steady growth of its deposit base (+1% QoQ; +11% YoY).
  • As of September 30, 2021, the Bank´s capitalization remained solid with a Tier 1 Basel III Capital Ratio of 21.3% and a Regulatory Capital Adequacy Ratio of 16.9%. Equity levels were down (-2% QoQ; -1% YoY) mainly due to the Bank's open market stock repurchase program, under which 1.8 million shares for a total of $28.6 million, with an average price of $16.17, have been repurchased since its launching in mid-May of 2021.

CEO's Comments

Mr. Jorge Salas, Bladex's Chief Executive Officer said: "There is no doubt that economic recovery is underway in Latin America and the Caribbean. According to the International Monetary Fund, Real GDP is projected to grow by 6.3 % in 2021, followed by a more moderate rate of 3% in 2022. From an overall perspective, Bladex foresees an heterogenous recovery across Latin America, with the two biggest economies in the Region, Brazil and Mexico, growing at 5.2% and 6.2% respectively this year. High commodity prices, and its pent-up demand, record high remittances in some countries and the reversal of monetary and fiscal policies are the main favorable external conditions. Having said that, the pandemic still casts shadows over parts of the Region, as the recovery was robust in the first quarter of 2021 but lost momentum in the second and third quarters as COVID-19 cases rose again in several countries."

Mr. Salas added: "In this context, third quarter results improved once again, continuing the positive growth trend in revenues, both from higher interest income, and higher fee income coming from our syndication business and our letters of credit business that is having a record year. The loan book and investment portfolio have now five quarters of consecutive growth, with a combined total of more than $6 billion, surpassing pre-pandemic levels. Solid loan origination was made at higher spreads than the loans matured during the quarter, an inflection point as it reverts the recent downward pressure in spreads experienced since the beginning of the year."

Mr. Salas concluded: "As I have been stating in previous quarters, after operating for over 40 years in Latin America, Bladex remains cautiously optimistic and uniquely positioned to continue growing and taking advantage of the opportunities that keep arising in a Region that we know very well. The Board decided once again, to maintain the quarterly dividend of 25 cents per share and the share buyback plan announced last May under the open market program continues to be executed as planned, reaffirming our solid results, confidence and commitment in the best interest of our valued shareholders."

RESULTS BY BUSINESS SEGMENT

The Bank's activities are managed and executed through two business segments, Commercial and Treasury. Information related to each reportable segment is set out below. Business segment results are based on the Bank's managerial accounting process, which assigns assets, liabilities, revenue, and expense items to each business segment on a systemic basis.

COMMERCIAL BUSINESS SEGMENT

The Commercial Business Segment encompasses the Bank's core business of financial intermediation and fee generation activities developed to cater to corporations, financial institutions, and investors in Latin America. These activities include the origination of bilateral short-term and medium-term loans, structured and syndicated credits, 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.

Profits from the Commercial Business Segment include (i) net interest income from loans; (ii) fees and commissions from the issuance, confirmation and negotiation of letters of credit, guarantees and loan commitments, as well as through loan structuring and syndication activities; (iii) gain on sale of loans generated through loan intermediation activities, such as sales and distribution in the primary market; (iv) gain (loss) on sale of financial instruments measured at FVTPL; (v) reversal (provision) for credit losses, (vi) gain (loss) on non-financial assets; and (vii) direct and allocated operating expenses.

2

Commercial Portfolio by Client Type

Commercial Portfolio by Product

(EoP Balances, US$ million)

6,008

6,188

5,087

33%

39%

33%

14%

18%

17%

53%

49%

44%

30-Sep-20

30-Jun-21

30-Sep-21

Financial Institutions

Sovereigns/Quasi-sovereigns

Corporations

(EoP Balances, US$ million)

6,008

6,188

5,087

13%

15%

10%

31%

32%

37%

53%

56%

53%

30-Sep-20

30-Jun-21

30-Sep-21

Letters of Credit, Acceptances, loan commitments and financial guarantees

contracts

Medium- and long-term loans

Short-term loans at amortized cost

Bladex's high-quality and diversified Commercial Portfolio maintained its persistent quarterly growth trend, reaching $6.2 billion at the end of 3Q21, a 3% QoQ increase compared to $6.0 billion a quarter ago, and a 22% YoY increase compared to a year ago. Quarterly increases were mainly driven by higher lending origination (+10% QoQ; +53% YoY), mostly centered on Investment Grade countries (+17%. QoQ). Meanwhile, during 3Q21 the Bank continues to collect all scheduled loan maturities, evidencing the high quality of the Bank's borrower base and short-term nature of its business. On an average basis, Commercial Portfolio balances reached $6.0 billion for the 3Q21 (stable QoQ; +21% YoY) and $5.8 billion for 9M21 (+7% YoY), also evidencing the growth throughout the year.

As of September 30, 2021, 77% of the Commercial Portfolio was scheduled to mature within a year, down 1 pp compared from the previous quarter and up 4 pp from a year ago. Trade finance transactions represented 69% of the short-term origination, up 7 pp compared to a quarter ago and up 14 pp compared to a year ago.

The following graphs illustrate the geographic distribution of the Bank's Commercial Portfolio, highlighting the portfolio´s risk diversification by country and across industry segments, as of September 30, 2021:

Commercial Portfolio by Country

Mexico

2%

IG: 46%

Chile

1%3%

14%

Non-Latam

3%

5%

Peru

5%

Panama

Uruguay

10%

7%

T. & Tobago

Brazil

$6,188

Colombia

8%

10%

Guatemala

5%

Ecuador

Dominican Republic

4%

Costa Rica

2% 3%

18%

Argentina

Paraguay

Non-IG: 54%

Other Latam ≤ 1%

Commercial Portfolio by Industry

Financial institutions

Metal manufacturing

1%

Oil and gas (Downstream)

1% 5%

Food and beverage

2%

2%

2%

Electric power

2%

2%

Oil and gas (Integrated)

2%

Other manufacturing industries

7%

44%

$6,188

Coffee

Oil and gas (upstream)

7%

Retail trade

Other services

7%

Mining

8%

Grains and oilseeds

8%

Sugar

Other Industries <1%

3

Bladex's credit quality remains sound with a well-diversified exposure across countries. As of September 30, 2021, 46% of the Commercial Portfolio was geographically distributed in investment grade countries, up 3 pp from the previous quarter, with a continued focus on preserving high quality origination and sound credit exposures, and down 13 pp from a year ago, which is mostly explained by the Bank´s decision to classify Colombia as non-investment grade during the previous quarter, following the recent downgrades by two main credit rating agencies, even though Colombia is still rated investment grade by one of the major credit rating agencies. Brazil continues to represent the largest country-risk exposure at 18% of the total Commercial Portfolio, of which 82% was with financial institutions. Other relevant country-risk exposures were to investment grade countries such as Mexico at 14% and Chile at 10% and top- rated countries outside of Latin America (which relates to transactions carried out in Latin America) at 8% of the total portfolio.

The Commercial Portfolio by industries also remained well-diversified and focused on high quality borrowers, as exposure to the Bank's traditional client base of financial institutions represented 44% of the total Commercial Portfolio, and exposure to sovereign and state-owned corporations remained at 17% of the total portfolio at the end of 3Q21. The remaining of the portfolio comprises top tier corporates throughout the Region. The portfolio continued to be well diversified across corporate sectors, in which most industries represented 5% or less of the total Commercial Portfolio, except for certain sectors that the Bank considers as defensive under the current context supported by higher commodity prices and LatAm trade flows, such as Metal manufacturing and Oil & Gas (Downstream), each at 8%, and Food and beverage, Electric power and Oil & Gas (Integrated), each at 7% of the Commercial Portfolio at the end of 3Q21. In addition, sectors categorized by the Bank as high risk, such as sugar and airline industries, remained downsized at 1% and 0.8% of the total portfolio at the end of 3Q21, respectively.

Refer to Exhibit IX for additional information related to the Bank's Commercial Portfolio distribution by country, and Exhibit XI for the Bank's distribution of loan disbursements by country.

(US$ million)

3Q21

2Q21

3Q20

QoQ (%)

YoY (%)

9M21

9M20

YoY (%)

Commercial Business Segment:

Net interest income

$21.3

$20.5

$21.2

4%

0%

$60.5

$66.9

-10%

Other income

4.9

4.5

2.9

10%

69%

12.7

5.5

131%

Total revenues

26.2

25.0

24.1

5%

9%

73.2

72.4

1%

Reversal of (provision for) credit losses

0.1

(1.0)

(1.4)

111%

108%

(0.9)

1.4

-166%

Gain on non-financial assets, net

0.0

0.0

0.1

n.m.

-100%

0.0

0.0

n.m.

Operating expenses

(7.9)

(7.9)

(6.5)

0%

-21%

(22.9)

(20.1)

-14%

Profit for the segment

$18.5

$16.0

$16.3

15%

13%

$49.4

$53.6

-8%

"n.m." means not meaningful.

The Commercial Business Segment's Profit was $18.5 million for 3Q21 (+15% QoQ; +13% YoY). The quarterly increases were mostly attributable to improved revenues (+5% QoQ; +9% YoY) driven by higher NII mainly on higher average spreads, and the increased activity in its transaction-based structuring and syndications business combined with the solid results in the Bank's letters of credit business. In addition, the Commercial Business reported a $0.1 million reversal for credit losses resulting from the improved mix of its Commercial Portfolio exposure at the end of 3Q21, compared to the $1.0 million and $1.4 million provision charges for expected credit losses in 2Q21 and 3Q20, respectively.

Year-to-date Commercial Business Segment's Profit totaled $49.4 million (-8% YoY), as the more than doubled other income (+131% YoY) mostly from improved fees and commissions was offset by the 10% decrease in NII primarily impacted by lower market base rates, the $0.9 million provision charge for credit losses associated to portfolio growth, compared to $1.4 million reversals in 2020, and higher operating expenses.

4

TREASURY BUSINESS SEGMENT

The Treasury Business Segment focuses on managing the Bank's investment portfolio and the overall structure of its assets and liabilities to achieve more efficient funding and liquidity positions for the Bank, mitigating the traditional financial risks associated with the balance sheet, such as interest rate, liquidity, price and currency risks. Interest-earning assets managed by the Treasury Business Segment include liquidity positions in cash and cash equivalents, as well as highly liquid corporate debt securities rated above 'A-', and financial instruments related to the investment management activities, consisting of securities at fair value through other comprehensive income ("FVOCI") and securities at amortized cost (the "Investment Portfolio"). The Treasury Business Segment also manages the Bank's interest-bearing liabilities, which constitute its funding sources, mainly deposits, short- and long-term borrowings and debt.

Profits from the Treasury Business Segment include net interest income derived from the above-mentioned Treasury assets and liabilities, and related net other income (net results from derivative financial instruments and foreign currency exchange, gain (loss) per financial instruments at fair value through profit or loss ("FVTPL"), gain (loss) on sale of securities at FVOCI, and other income), recovery or impairment loss on financial instruments, and direct and allocated operating expenses.

The Bank's liquid assets, mostly consisting of cash and due from banks, as well as highly rated corporate debt securities (above 'A-') aimed to enhance liquidity yields, totaled $827 million at the end of 3Q21, down from $999 million a quarter ago and down from $1,465 million a year ago, as the Bank adjusted its liquidity position consistent to pre-Covid levels considering the improved market environment and the Bank's ample access to diversified funding sources. As of September 30, 2021, $567 million, or 69% of total liquid assets represented deposits placed with the Federal Reserve Bank of New York, while $195 million, or 24% of total liquid assets represented corporate debt securities classified as high quality liquid assets ("HQLA") in accordance with the specifications of the Basel Committee. As of the end of 3Q21, 2Q21, and 3Q20, liquidity balances to total assets represented 12%, 15% and 23%, respectively, while the liquidity balances to total deposits ratio was 24%, 30% and 48%, respectively.

The credit investment portfolio, related to the Treasury's investment management activities aimed to complement the Bank's Commercial Portfolio, increased to $573 million at the end of 3Q21, a 78% increase compared to $322 million a quarter ago and more than three times higher compared to $127 million a year ago. Consequently, the Bank's total Investment Portfolio amounted to $768 million as of September 30, 2021, up 47% from $523 million a quarter ago, and more than three times higher from $234 million a year ago. Overall, the Investment Portfolio mostly consisted of readily-quoted U.S., Latin American and Multilateral securities (refer to Exhibit X for a per-country risk distribution of the Investment Portfolio).

On the funding side, deposit balances increased to $3.4 billion at the end of 3Q21, up 1% QoQ and 11% YoY. The continued growth in the Bank's deposit base denotes the growth of its Yankee CD program which complements the short-term funding structure, and the steady support from the Bank's Class A shareholders (i.e.: central banks and their designees), which represented 47% of total deposits at the end of 3Q21, compared to 48% and 51% of total deposits a quarter and year ago, respectively. As of September 30, 2021, total deposits represented 60% of total funding sources, compared to 61% the previous quarter and 60% a year ago. In turn, short- and medium-term borrowings and debt totaled $2.0 billion at the end of 3Q21 (-5% QoQ and YoY). Weighted average funding costs improved to 0.89% in 3Q21 (-4 bps QoQ; -37 bps YoY) and 0.97% in 9M21 (-78 bps YoY), benefiting from the impact of lower market rates, as well as lower spreads paid on funding.

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BLADEX - Banco Latinoamericano de Comercio Exterior SA published this content on 29 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2021 22:46:02 UTC.