Banco Latinoamericano de Comercio Exterior, S. A. (BLX) 12 Feb 212020 Q4 Earnings call transcript

Ladies and gentlemen, hello and welcome to Bladex's Fourth Quarter 2020 Conference Call on this 12th day of February 2021. This call is being recorded and is for investors and analysts only.

If you are a member of the media, you are invited to listen-only. Bladex has prepared a PowerPoint presentation to accompany their discussion. It is available through the webcast and on the Bank's corporate website at www.bladex.com.

Mr. are today us Joining Jorge Salas, and Executive Officer; Ms. Chief Financial Graciela de Chief Mendez, Ana Officer. be earnings corporate on issued comments based Their will their and available earlier is release, on the website. today was which made pursuant in and of described Securities Section The following of Private statement to Safe Securities forward-looking the of Harbor Act Reform XXXX. the the Litigation XXE statements for XXXX Act is Exchange trends may such results, we communications, make the anticipated as plans regarding these that condition. forward-looking, certain its In are affecting future statements Bladex's and financial results in market statements and day statements the call, forward-looking are undertake based These Bladex's does knowledge. expectations events Bladex broadcast conference to on the this subsequent these expectations on of of update not initial and or the the filings Bank's press Various uncertainties risks, releases Securities Exchange in with Commission. and assumptions detailed and and are these and the more Should any differ the underlying one or results expressed prove these results significantly or of of may materialize, should actual in incorrect, communications. assumptions from or uncertainties risks implied that, I And the to am over turn with Mr. pleased to call presentation. Salas for his

morning management customary then And questions. for Ana's sheet comments, of and will open for then the I morning, And about Ana Today, to results. today our P&L remarks Thank once discuss overview team. during of will year. you, executive few balance us as joining After talking quarter to am a it. members with quarter, some it Ana and everyone our whole fourth the Mendez here again the I'll CFO, an be the This I David. and our implications good will discuss I make up closing

that different quarters. impacted to America to most and GDP been short I'd estimate The than Latin in Latin that the current banks, that decreased again, as a decrease having in diligently Moreover, continue exclusively no XXXX contraction more most model comparative manage previous I advantage last varied changing during towards context. our of portfolio quarters. us by environment. above doubt to have So primarily was what the because changes, tuning the in and defensive XXXX. one to noting it a compared the countries. importance X.X%. that highlight did allows significant three world's sectors XX to portfolio is outlook much in like of lending GDP business drastically twice notch America dynamic more exposure to of Simply X.X% revised And all, were top different in the for year continuously there's constantly Having and our in once customers, regions the it a than evolve countries, this in as last it in term diversify be will our their as countries ability Why? the

loans I countries. and $X.X during address entire matured disbursed during loans the over$ nearly X.X more slide billion further in and can sectors the defensive detail of the would the maturing LIBOR billion you on rate on was roughly the than focused points In sides portfolio what portfolio of pristine. the bank new quarter. the that happened topic and and liquidity. approximately in our talk both side today term respect as on now quarter. slide crisis quarter mature Let the the by the the tenor was market rate context down year. all Growth the about XX plus the is short points me Also, was fourth to average It normalized average disbursement our moving end $X.X was previous mentioning The collect billion nine relatively grew balance pricing with of portfolio the quarter, with fourth basis after the XXX% basis during XXX by of to of levels with sheet. commercial XX% Beginning then the quarter at from portfolio was continues reaching X% and of that of replaced quality previous the to We virtually quarter more and high closed and peak in months lending, scheduled X, term the see this short of floor asset quarter the for again is the of mostly in were half X. maturities worth presentation.

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It evolution portray crisis The Each following levels resilient sectors/ advantage our hand in other you can industry. by shows beginning in gas portfolio slide favoring at see exposure took X% liquidity of asset our use growth said since terms taking we Loan institutions, the power of at electric Similarly, were focus how the measures and and Argentina, as participation quarterly managed continue short-term in well important now the portfolio. less will defending prudent the of end food relatively of sector. than X, the represented again nature X composition. the with all sector the beverage on onset financial higher interest million that the of and slide, a in $XX inflection we points origination the And impacted growth To defensive strategy of later X% our in as downstream of course, oil I buffer. systematically concentrated prudently in of representing our the an that as the as X% asset this to mainly graph and our was served portfolio. of is third of QX slide in quarter of the explain composition. portfolio liquidity XX% is Ana an year clear call. in crisis, further, in the marked down On which, total the effective net that in will income, which This of

year, quality slide on cash X, the Switching By see bank's improve been composition, also only the throughout in growth, a we commercial second the how million. all portfolio, improved built pride having complement the of portfolio not overall mix end, portfolio split but high complex return $XXX bond the portfolio resume has half to portfolio. year. quality as and in at we on faced to the During started enhancing liquid the asset with during invested assets, American sum, of position the build conceived of the both reduce corporate mostly asset the us allowing take yield second investment it the between aimed In the names credit and Latin and to a may year otherwise was Fed challenges to semester, asset. liquid despite reaching you our terms very portfolio evenly our

A Moving evolved on our year. the during how the now worth funding other things to mentioning. of we X; the side mix showed are sheet balance in few slide

issuance, to region, the support and has thanks $XXX total First, Bond bank the shareholder, to reinforced which their central year. of the medium funding A million by base XXXX, the deposits. deposit in our lowest our bank stability Moreover, But XX%. to year-on-year. attracted end XX% further the Latin total to funding, base growth. Europe, been last and X% is the X% its By during bank from cost total term This up across program, long both through term in US, exceeding and Deposits, substantially of their percentage XX% and mostly private, year source funding public who syndications of Yankee our Asia increase grew investors end, attributable funding funding investment, America. funding consistently of share year-on-year Class which new of part the traction, banks also gaining reaching approximately to amounts transaction. continue COVID

to country the she of through the challenges mix Overall, can of advantage to quality clear the of the on in reduce as bank's the the effectively funding banks structure of soundness indication implications end resiliency from well access ability a change billion. has March. as on X% this funding amounted a to well. of changed; at correspondent sheet. which leave the portfolio. take down network as Finally, business sides mix can excess the call my industry so model. turn there. total I'll to of all reliance And balance of flexibility US, very from changed, you I'll our less on Having we dynamic that year Asia said in of was to liabilities the changed both asset protect banks, in in adapt this comments to of and Ana XXXX walk $X mix and pandemic, correspondent bank the XXXX its of its wide this. of P&L see, the was But a than of you the Europe Funding asset now XX% as to versatility and line

Thank you, morning Jorge, and all. good to

loan on quarter, the slide to around quarter as and of close credit on the quality XX provisions for slide the well collection losses quarters during activities continue relatively see revenue a you $XX.X So loan X% stable the rate fourth let's where P&L the of ongoing our for preceding million, evolution high of reflecting XXX%. as origination XXXX of up profit from recording to can

coupled a the of XX% defensive market mentioned, continued income account further of preserve including generally base, lower will the XX% a of year loan by balances, Jorge the countries which mainly by liquidity I expenses equity approach, seasonal bank risk reflecting impact These since increase financed COVID-XX, quarterly high as reduction from offset with was and Net in As the on $XX.X year, the on detail partly of onset further explain by lower sectors. bank's the XXXX down negative overall lower the yield to of and were in for revenue, million, were ahead. the assets, reduction in rates, XX% previous the quarter-on-quarter.

absence low or that reflecting result, The fee down year. interest or year, down mostly relating transactions the a $X.X market XX% in the structuring latter executed million, activity $XX.X net was of line another during was million, income income of As new very business the to XX%. annual while throughout

Annual compensation, fees quarterly XXXX down the from expenses the year decreased compared as credit the the instrument the partly under of year, XXXX. a of for build in X% in loan loss as I a resulted a reduction and to for of close to well in were in as attributed XXXX derivatives towards level million profits of up by X% Although fourth and the Lower hedging operational the currently credit context. to Lower fair and letter credit is part valuation will a XXXX the provision transactions during instruments, X.X% respectively, XXXX. returning on a XXXX, of to employee returns mostly X% measures performed restructuring other related $X.X reversal annual value from new for extent, X% losses, X.X% also and year quarter ROAE a for year. impacted due financial by lesser variable for year-on-year letter previous compensated business back ahead. in also the impacted in of after and recording activity. savings million second compensated implemented revenues operating quarter to pre-COVID These second the second of X% pipeline debt more derived of of cost decreased were year detail by ongoing. current ROAE the and to year, which of in an performance a to decreased and half full decreased based to when by adjustment to revenues $X.X They quarter received refer the month the the by the last Overall from well started

which higher XX% X.XX% decreased drivers evolution, down were Moving from LIBOR the $XX.X the the for the for net the balances to net pull well from previous to quarter, able interest on from the market of we quarter to replacing income total downward Net to quarter main a interest was we average at fourth slide participation balances approximately for of lower million, X% rate. largely of five margin on from increased revenue. revenue XX; bank present offset lending income of loans X% portfolio the points down the repricing continued as cash previous as basis interest bond level liquid present

of in XXX and differential, cap last crisis, bank overall XXXX, fourth result $XX of XXXX able points XQ rate a bank that year up is when started quarter. XX% average during and spreads that market down due to the lower to compared XXXX. the rates during the charge funding a basis in most XQ been the that impact pace favorable Net points XXXX the year, level This to or rate the position from the together month three a year during liability quarters in and rates first higher change was repricing of interest market lending with interest sensitive a was the basis by loans widened million lending so of between During difference liabilities the decreasing the XX and loan income net denoted before, parts $XX.X have at of for rate environment, to asset mostly million the composition. the maintains faster

down the asset base; from average year XXXX, turn XXX a loan down year average basis rate Investment loans rate For Securities points was In portfolios by the alone the basis XXX was weighted LIBOR liquidity is to points. including base previous and X.XX%.

effect lower interest of rates, impact of assets. in $XX the average. about in to XX% the The negatively in at XXXX on very from base from equity total amounts in decrease low [Indiscernible] a $X cash a invested to So impacted billion in XXXX productive XX% repricing of asset XX% whereas level was million. market net high of change also net rate assets estimation income Considering while NII balances XX% decreased by loans during average to yielding mix, increased

weighted compensated basis All also of by of points differentials before rate that positive mentioned were net partly average to lending down these effects as the XXX increased was by I rate X.XX%. funding impact a

forward moving which on to expected standard losses. for XX, slide incorporate credit X allowances accounting evolution the we looking present losses IFRS Now under of

impact of economic accounted estimation the for. environment best current the of Bladex's already that is So

exposure, total of for risk X risk our as and countries required $XXX forward IFRS financial we the evaluated as collective concluded of our quarter that sectors, fact, in and fourth to of accounted portfolio guidelines, the loss. our and the in In impacts low generally realities million lower have methodology macroeconomic model IFRS well Peru, high institutions during as reserve the to market as which ensure XXXX estimation as reserve origination as by operate stage $X.X billion, bond all liquid or requirement. by COVID-XX categorized incorporates Chile lower increased in Colombia, that in quality research increased the rise XX% the of new looking we one adequately effects well of a of as expected in and and Brazil, included such relatively are

our countries amounting two remained risk, and stage to addition In XXXX. in at X% by the as assessed $XXX list XX, well portfolio bank, in exposure, total as including having exposures sectors loans million at watch as increased December to origination since of their

fourth In XXXX, before for classified the quarter, the a The previous addition, and Jorge throughout NPL at result were with the stage $XX reversal X impaired higher of of for quarter country, stage in to quality quarter loan credit X.X% counterparty. total XXXX credit of provisions loans million at during from overall recommended $X.X stood again that the million to the or of was in X so successful XXXX. amounting end ratio XXXX the the a fourth origination year as exposures risk year collection reflecting coupled manner, provision $X.X reversal the higher year, same million. of impact increased In sectors was net

to million related the a During of previously in were remaining relates to credit XXXX, which of a write of the to impaired company the credit the The reducing against American company's during that sector of reserves, $XX.X call to quarter basis Thanks. allowance XXXX, sale loans for turn $XX.X With in Jorge. South portfolio of the million back through like points remain of the sector airline credit XX, XXXX. second which or down total million million at from ranged a XXXX now XXXX off NPL, XX allocated the Brazil, to sugar during exposure previous written the represented from the cycle, a XXXX, of off credit total from loan remains all $XX.X of the individually was Overall, bank's quarter the zero, XXXX. this, loans in year to third sale million in of will total December that I of $XX.X March which $X.X losses current.

I disperse a Ana. Bladex very been has maturities this $X of circumstances, year. and truly billion since throughout has that proud for you, very Thank managed the over Bladex. good pandemic all started given I'm the believe team virtually year that to in time, the collected the

assets navigate our model We find quality the the of We the of making business have best ourselves XXXX. our liability and advantage to acted of levers environment the low of protect swiftly well current side. prepared the rate taking on to

the has at the impacted respect of not to the with causing most erratic of beginning, countries of region slowing world. the Several stringent the lockdown region X% grow one be that unfortunately, end very a Public are been And economy to virus. of in the between the XXXX. inside their most reach that in that pandemic system. the XXXX, onset in America limited estimate pre general damage I half the second spread room the health in mentioned countries severe still expected Latin year. by to we levels regions that in mostly said public from will X.X% applied our the have As of and GDP Having and has fiscal of the pandemic the measures we'll yielded results continue in policies

set some may then of of and the signs. challenges. also The liquidity should although this improving. different faster time, Confidence in distribution seeing their countries the it take Consumer some indicators however, contribute growth. external And are prices, own positive to increase We are have commodity generally vaccines, the

we through and largely continued case, our closely at the have So whom by support are offered to for we In comments the crisis clients with will who Bladex during circumstance. continue will work any the shown vary resilience financial speed have country. to our unprecedented today. Those of recovery

it Now up I questions. open will for

first question Instructions] Wiggins comes Partners.] with [Jim from Fronius [Operator Our

losses. I've feel last what curious to the a impressed wondered are bank sir. of XX you sort Yes, for minimize you you to owned has much how way. been in ability of of time, and you that positive could forward. the very going I just the your I'm loan if what more hope done have do your with years or stock so and over goals period evaluate But

growth we going How see do forward?

Yes.

Okay, so the acquire to is as oil our resilient gas, company. in other some started beverage. clients or expand their demand or organically seeing so of especially We've increased food we also sectors, let and on the are reopen, economy me -- utilities, see and inorganically working strategic to plans either some

to Our clients turn provide solutions. us financial to

So we're the company seeing trying maturity some their funding in also profile. traction debt institutions financial and there. structure and seeing this context, in We're improve to

and So half we a continue give your answered combination we don't I more moderate for term know portfolio are right well, the can has the exploring those and forward. we that that commercial going our year, as through of second I growth question, price. if guidance the structure grew credit growth. and size. quality to But medium in of you right cannot XX% not the see sacrifice you will specific I facilities tell

Okay, I understand.

the trends was loan in mentioned any positive that So think that or I recall, second loan spreads it quarter terms widened now? of you've you appreciably. spreads see do have And your I first

in And also last quality that particularly And the level offered, we in that in see do spreads the are that to we of definitely. that a of graph, general the the close have quarter, show saw what started obviously has which clients, used with are top we we more Yes, we're normalized the lending. to liquid we, working COVID. of pyramid before seeing in to notch, very tier the highly to terms of price highly targeted and top with that fact

charge to we of So able that crisis. short, the the beginning put see did of we the it reversion at to in start we spreads were a

with Mr. Wiggins up. follow Partners Fronius has a

came a still time. you over to difficult too recall longer Sorry, XX I really you hope the Is much there to a I about your wasn't target equity if had wanted, bank's any of for -- goals? bank, during wonder respect just odd to are that time. take that quantitative same The don't with next a were tenure any didn't of And other when anything started, just But I years? over sort up nature you term into goals assets I didn't to you any mean you very to were articulating questions. to years the I they reach you if ever get, longer as sure assets hope some ago. you or there your get term

our for asking So about bank? the vision returns Right? of long-term you're

done sense sort I this to difficult I of if accomplish mean to you've trying I'm managing you're job just Yes, that. a of beyond of just get what great period, through trying a

First, go the this at portfolio was we double to through then the crisis, has returns the lowest loan but $X this were past mean, are last in portfolio to billion been back I decade. it had, bank the close And and has digit. have I in right? XXXX mean we

So same was exactly the doing thing now. doing that basically is and bank the

of that, a a what that's client base environment, do it. can of and have economies and do the from have to very very bigger our there, space, part back just can make this on are we our a in advantage scale, clients. bank is a several when of operationally, obvious at time we for taking of can sure on share internal different scale that wallet we reasons, working cannot work limited that digital making we sure of processes, but are the to capabilities initiatives that I roll it now have share with I where share, lot Just have We we and solid

source be of our will So more selling products new an cross to income. just client base important

have At other no we queue. the in this questioners time,

for So our speakers closing back it I'll to comments. turn

everybody thank So Thank like if there are stay would no and safe. I to you. please further questions

That gentlemen. Thank this morning's presentation. concludes you, ladies and

today. And lines. for your disconnect thank may us you phone joining You