Banco Latinoamericano de Comercio Exterior, S. A. (BLX) 24 Jul 242024 Q2 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to Bladex Second Quarter 2024 Earnings Conference Call. A slide presentation is accompanying today's webcast and is also available on the Investors section of the company's website, www.bladex.com. There will be an opportunity for you to ask questions at the end of today's presentation. Please note, today's conference call is being recorded. [Operator Instructions] I would now like to turn the call over to Mr. Jorge Salas, Chief Executive Officer. ahead. go please Sir,

Annie, and I Quarter for call before start questions. XXXX for key financial our as our everyone, detailed from provide for of initiative update analysis by us open you our we for performance our usual, Then, quarter. Second Earnings After the plan CFO, thank morning, the will joining a that, you statements. today summarizing our will Good strategic Call. a I'll on

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business and We Dominican sectors. Furthermore, transactions, and and This also a Mexico, quarter. for syndication the was Guatemala, led reaching in our syndication credit the I increase has their half of the quarter. year, pipeline sustain team continued achieved clients who perform momentum energy, serving should region's the XX% had increase. on gaining, across with income. proud exceptional a second year-on-year team syndications the driven our teams. traction well-deserved syndication $X.X the which of by letters Also XX% billion reputation record-breaking in industrial The of a increase during structuring fee Transactions which have team fees, quarter-on-quarter enhanced were strongly performance achieved reinforces a we've Republic, team, one X X% Colombia, robust and financial closed the and of the top to also structuring quarter-on-quarter. am Chile our our is the of

an of front, with On half we closed the expense ratio the year efficiency XX%. the of first

expenses income however, enhance quarter, year of of execution our call, strong year the quarter We efficiency same in on with no our of our may, still increase this to robust growth period strategic $XX an our substantial the doubt successful you plan. that this with line a bottom continued of the a to keep and year-over-year compared planned consistent XX%. All an operational last is year. second capabilities. XX% to to business strength expect say, and representing increase for of below -- I'll our in ratio is There due projected the the the testament the a enhancing, half previous model the initiatives net last said end in I should As to led million

optimized the of bank report to equity to of compared This strong period profitability second on pleased XX.X% XXX that an points its with quality. I'll it I'm for quarter, for analysis. last operates the return hand no liquidity a financial to reflects a of go risk FX same asset our increase gap, a and over capital detailed basis ahead. year. now and CFO, Annie, has a historically Annie, the Finally, allocation excellent minimum

Thank and morning, you, Jorge, everyone. good

to move now Let's Slide X.

to net let with and half XX% on a the for increase As results the from income performance maintained $XXX.X consecutive net million for of up Jorge mentioned, XX% quarterly strong million of annual Bank up These ROE the and reaching $XX a over the marking assets X% has quarter, an second return first XX%. trend a year, and upon represent year. Jorge with Loans income a add by increased by sheet previous by basis portfolio from X% me touched on last year. by annual bit last off has from more, line starting X% commercial performance, expand grew bottom drivers this asset an of so it Slide XX% our items, on growth and were a the balance the composition X. main Including on up quarter.

growth, to business, receivables we and vendor lines operating to continue or in letters see During performance add structured XX% have in we robust our and as by increase This new clients finance finance. American by and of the region maintaining and solutions driven pressure. Colombia at the transactions see such execute as a LatAm along economic competition our on at forward. increased margin liquidity with closely good Overall, present while on credit of spreads strong by opportunities. pipeline trade-related where to the slide, Caribbean remained increase diversified average with as Central of and for substantial originated of newly in right, continue Republic observed XX% to ones and top particularly business, denote solid year. In quarter-on-quarter each. increase and formed on our to all Nonetheless, Brazil on the infrastructure markets, syndications from where both loans business each, heightened and with going exposures demand throughout leading longer-tenor our Mexico to next cross-border and confirmation region, this efforts second our we the in quarter, is portfolio a at our countries also cross-sell followed which providing be commercial desk, well Both we our stable continues prospects, XX% and Dominican the Guatemala the to and well through risk/reward clients. We last transactions focus an project with were to tailor-made growth a we products, able our discounting lending

$X.X $X.X non-LatAm investments contingent Investment U.S., low-risk credit exposure $XXX represented agency, as diversification IFRS portfolio prior provision X it, or quarter, the increase Of On a eligible the XX% Securities placed to X. end, is reserves. of items providing you our quarter credit side, investment-grade combined, book. of the is XX.X% charges per the an from most credit liquidity is $X.X off-balance to the million in which Furthermore, average portfolio $X.X is risk million that Bank's issuers, for loans, Reserve York tenor growth same stages million. at X, discounted explains of our this placed of is the and see remaining over increase over Slide XX% or by the at providing mostly total can as billion, X our portfolio Federal sheet billion at funding. left-hand from in quarter. classified the X% credit country New with the for of totaling through issuers and quarter, of years. On the The X with be previous Stage exposure, with little exposure most Stage thus remain accounted

downward process. of risk exposure On the short Stage preceding the side, This monitoring, has of or although risk, government exposures client special increased has improved. exposure X.X% has exposures of revised its low exposure collection quality X and as very overall part as offset which been total of the mentioned tenor of explained million. X% our on quasi with $XXX from and/or represents risk the now mostly scheduled is quarter, by increase ratings evaluation maturities proactive other X Notably, higher Stage risk categorized by

stable a second allocated reserves remained relatively reserve during the Stage quarter. a requirement with credit $X.X As only million result, of X

strong the credits of a Finally, coverage. million, remains $XX total X Stage or a reserve only with of Overall, robust NPLs, with X.Xx. the of a classified amounting to minimum exposure coverage reserve X.X% portfolio remains as impaired quality total

moving Slide Now X. to

Our funding now deposits the well XX% of accounting base total financial remains liabilities. with for diversified

that has continues dollar source with which their stable from of international deposit a by billion, from shareholders, over quarters reserves from of total highlighted corporations, deposits, our very part us, As the quarter. Central our the to as and efforts. showing The time. up our cross-selling and growth XX% source result preceding of trend, Banks, strong reaching been robust place account increase show base a of comes banks for U.S. who a several $X.X XX% represents XX% year funding a a Jorge, Class remaining last A a a client over growth XX% our last

As market, CD Jorge both tenor mentioned another the on by out through volume and with important recurrent geographic position of earnings diversification. The and with to broad a be Yankee presented of New to broker-dealers funding end solid already has and which, pointed global worldwide, markets access generation. a at XX% distribution, strong program, syndicated which banks continues agency to June. along X deposits granularity, in correspondent the equity also funding network enhanced provide total representing global out, York our base operates continues provides of our Bank's our Jorge of Slide capital ample transaction

recently share quarterly the financial per dividend, declared unchanged strong from a on performance. preceding the $X.XX of quarter Board Our back

our levels and defense current we maintain investment-grade ratings. ratios our business Even our of as balance to risk grow as at our capital our and in we internal to sheet, a continue appetite reflection of aim

this of and XX%. Moving on revenues. income margins performance. over income last strong increase Sustained Slide higher you the asset of component have and $XX margins, volumes annual has million, evolution X X, representing see to of main on top the an the to stable remained performance Net quarters driven can at line interest average P&L interest net close

higher our in or spread and of interest the continuing Over a in momentum Enhanced the interest allocation of lending efficient base, net transaction at new have margins last of cost emphasis improved NIM, positive rates. on with and we execution with a pricing net market strict a XXXX. trend supported optimization strategy by higher began also management, year, It that seen with margin, funds capital financial NIS or spreads reflect reflects interest deposit along the level. a

to from reaching assets second quarter, reduction on rate the reducing which mainly very preceding correction same market our interest a XXXX, saw and XX our it fee liabilities. the During as rates the yield the When NIM X.XX%, benefit gap curve expect rate a and last base doubled resulting deposit of quarter, we decline curve, base, nearly the should the position. Slide respectively, the showcases we differential short-tenor slight In between widely of higher, effect from income performance. begin X.XX% in yield anticipated, inverted of solid year. in a and second NIS period short-tenor interest compared to the quarter

to trade Our letter key has this Once we complete well client automation key million, processes $X.X product, finance of quarterly as stream. continue we credit scale strategic be business, streamlined important control to as a profitable able the additions should very of a some phase grown opportunities. new pillar, revenue to this benefiting having from of level

also having fees we total mentioned, quarterly quarter, on as in outstanding $X.X Slide the in an line of to the by million during improving for strengthening increase quarter revenue over transactions Jorge million X the of The XX% plan. our salary higher at million, the quarter-on-quarter base relates quarter in strong year, in strategic $XX to structuring level outlined as our couple a a of expenses last growth. in mostly a strong denoting increased XX% on with capabilities, expenses our of remained XX% the efficiency workforce for to closed focus Bladex's execution first years close our a annual performance. On half in business, stable had generating $X As XX,

me turn you. call now to Let back Thank Jorge. the

you Thank Annie. very much

for important update Phase questions, of we like call the the on our of I'd share Before Strategic open to an progress X Plan. XXXX

selection will foreign excited security This implementation dedicated firm started our management over accurately manage of platform developed credit and to leading a in deploy has award-winning position their optimize Asia, to and and supporting operation, Europe, with with platform. The Bladex's integrated by I'm North across first the utilized Bladex this finance enhance last and PMO that swiftly after of the clients our few But and mentioned state-of-the-art finance transparency CGI of over office. institutions careful to a be technology. in in major Oceania. selected provider line under our bank LatAm, trade processing both solutions supervision trade months solutions. This global in Bladex's announce Bladex platform American trade to adopt and XX working by goal of trade our consulting just this to this call, project collaborating process, next ago single days countries letters a our vendor on significantly multidisciplinary enabling the as needs team efficiency, I capital top America is to in trade As IT Latin to corporate platform advanced world-class XX the banks maintain a of XX from a will technology the financial

updated leave progress now here other open to the questions. it of this We will Operator? the call for key projects. I'm on and going for keep and you

Instructions] [Operator Jefferies. from Inigo Vega question with comes Our first

X This Vega is from Inigo quick Jefferies. questions. Very

the any updates super from? is I you expect high commitments? ]? or seen First from can country? Second you platform. one products it coming with finance you trade is on sheet sheet. is one this? when some we that products? you Is there's the partnership is on the the of much say guarantees in platform new commitments color What of [ if growth understand new some less launch higher see particular additional with and the concentration GCI. we've give Is revenue Can it off-balance revenues sort than on growth I pipeline on any lending. is would on-balance mentioned Can it where in And

be can So if last would give some competition. us you one helpful. And that is color on on super the

like competitive me. see the competitive You the all comment X market for bps sort next the I've if do Capital where can are down of where competitive. environment the is in the not environment today, lending are you is months? few on you markets seen mentioned a and lot, open. That's It's over yields wide quarter. but that

Hola questions. Inigo. Great

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Sam, So, to tackle want one? do you first the

project lending, fees well Sure. been we as Dominican refinancing in plan. the initial acted strategic transaction which strategy with has and was very the well as that margin support you for rollouts of finance practice, in Thanks, expect of a referred U.S. to by we're with margins which we a here quite to Jorge. was needs. We new Annie higher given that the a dollar our point, and and comes have deals due strengthening transactions closing has competitive also pressure. favorable We're part the compared pressures the that of of our $XXX definitely expect to million environment as liquidity Thank navigating continue the interest feel sponsor tourism to economy, which already such not hold hope more has that higher counter net you. countries fed we the of on of of rollout cut much the before continue Besides the I to up active remarks. but continue, credit we particularly margins, to the to your as in in partially country to has arrangers this that some continue more pungent international by facing a like do in pressures, happy with mentioned the excess the but how -- pressures been Fed. Despite in stay rates however, facility that to mention infrastructure we one stable, joint global infrastructure local medium-term continuous the and dollars, be most Aeropuertos have also lead and able first-class a rather and -- in pressure AERODOM our that. only DCM margins ramp-up Special the borrowers bring good the the -- syndication as do Republic, of I the U.S. with nature international to well the markets of point that their is market, grown been other business. Case Dominicanos for started to to general that already

that your Okay, that's I answer -- question, Inigo? mean...

Super very Yes, clear. Absolutely. helpful.

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it. that's So, basically

opportunities developments closely forward. be right country in more the and is might following Argentina are we that and the there believe in We going direction, there going the

that the is running, case able some just business that CGI let We we investment the are the the volume are once -- platform me trade on platform, credit to of assumptions far and finance X.Xx the on up be process we As transactional as key just can investment. we letters behind today. believe the of processing share

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rates it's Our will political And question commercial account been behavior, the rates September. next the EU and same you from at the the Fed comes has tensions, region? favorable economic Grupo commercial countries that -- generated, Bancolombia. Her impacting do in from time, this the inflation tensions and see cut Valentina the into how in have in taking that is, where context question had expected Marin in

a take basis. me about little a country-by-country see a we on how bit talk let Yes, -- region the

Banks later clear that, And than perhaps regarding that in we economies of First the advanced Central thought. all, cycles. will rates, Central course, ease Banks to of monetary have it's their region, originally started in impact

So, the the remain end restrictive of real region year. in interest rates may towards the

basis, -- country-specific groups we have like we see X countries. a of on Now,

best prepared us. lot, first, group strategic where for let's policy -- Guatemala from also are fundamentals that so important perhaps economic terms have first, grown So be in will of response Republic we Rica, a Costa country and an Paraguay, for us, say, the Dominican Uruguay, the

I countries countries we growth They There another important Panama. political obviously, Colombia where do Brazil risks. Then where then their El due say, Ecuador, for political Salvador, have to minimal remain have -- weak Bolivia, we Peru, And are we persistent and size. outlooks. have Mexico and, of face Those of clear and group us important, that case, any economic Valentina, keep undergoing and are in -- those the challenges and solid to we very face you corporations I structural it's to long-term have think that with mean, something? knowledge. Sam, of a add now, do countries very that large, banks consists base in are adjustments. I that we relationships Argentina, have significant them and exposure. will mind most want are and client Second, our always so deep fiscal risk Chile,

Yes.

I this transactions in little think region, -- I in a finalize more to important very it's remind from, just question, take Bladex of as global when to liquidity really more profitable it's answer let's to dry approach Bladex historically, think And been the to also those that short-term find good tend say, can up. times times the that's opportunistic that duration. have bit noise have a and the for players

if So indeed happens. to that capture, we're positioned

point. Good

Jorge for today. That's much. for the we the concluding I'll line remarks. Salas to you all Mr. questions pass Thank the very back have Okay.

Okay.

whole call. So, I'm $XX as call. sustainable progress is keep top a going results. net record our Fees very and ROE. you The our you very in initiatives thank priority, in forward on yielding and this another Credit we're you phase to implementation on great Deposit summary, and for motivated, Goodbye. quarter Bladex the of next levels. of plan a That's to say income quality it share much, the the are our more sound balances on with very Strategic team next in million over key in see very and looking focused for record business over plan Thank joining. tangible, us. projects XX% remains plan. levels. for are In

concluded. is now conference Bladex call

You and disconnect nice have a day. may