Bladex Reports 4Q 2014 Income At $36.1 Million (USD), 51% Growth over 2013

Bladex CFO Christopher Schech

Banco Latinoamericano de Comercio Exterior, S.A. (NYSE: BLX, “Bladex”), the Panama-based supranational bank established by the central banks of 23 Latin-American and Caribbean countries to promote foreign trade finance and economic integration in the Region, announced its results for the fourth quarter and full-year ended December 31, 2014, in an earnings conference call hosted by the bank’s chief financial officer, Christopher Schech.

Bladex’s fourth quarter 2014 Net Income totaled $36.1 million (+51% year over year; +36% quarter over quarter).  Full-year 2014 Net Income of $106.9 million (+$22 million, or +26% year over year), on improved results in core business segments (business net income of $103.5 million versus $89.4 million in 2013) and non-core activities.

“This was a year certainly not without its challenges for the region, and for Bladex, mainly on the economic front, where some of the drivers of Latin America´s growth over the last couple of decades have lost a bit of their luster,” said Rubens V. Amaral, Jr., Bladex’s Chief Executive Officer. “Prices of many commodities continued their downward trend, the growth of the internal markets was less significant than in previous years, and last but not least the important reduction in oil prices, that has roiled global markets since the second half of last year. We also experienced more volatility in the capital flows towards the Region, as the US concluded the tapering of its QE3, paired with the lack of growth in Europe, and uncertainty about the Euro Zone, all of which led to a flight to quality, moving more capital towards the U.S. where the economy continued to present improved growth prospects.”

Bladex CEO Rubens V. Amaral, Jr.

Net interest income totaled $38.3 million in 4Q14 (+23% year over year; +4% quarter over quarter) to reach $141.1 million in 2014 (+$18 million, or +15% year over year) on higher average loan portfolio balances and increased net margins resulting primarily from lower average funding costs.

Fees and Other Income reached $7.0 million in 4Q14 (+30% year over year; +37% quarter over quarter), while full-year 2014 fee and other income amounted to $21.8 million (+$5.9 million, +37% year over year), attributable to increased syndication, structuring and distribution activities.

“As the 2014 results can attest, this focus does pay off as we make progress along above lines, and we were able to hit a few milestones along the way. We reached triple digit net income numbers, the highest level of core, recurring performance ever (leaving aside the years 2003 and 2004, in which we experienced a robust recovery from the aftermath of the Argentina crisis, triggering out-sized reserve releases). We surpassed the $3 billion mark in deposits at several times during the year, increasing average deposit levels by more than 8%. We significantly improved our core efficiency levels on the back of rising revenues while maintaining cost discipline. We doubled our income derived from our structuring and distribution activities. And, all-in-all, we were able to generate 12% of return on average equity and more than 14% of total return (dividends and year over year stock price appreciation) for our shareholders,” added Amaral.

Key performance metrics:

• Net interest spread (“NIS”) improved to 1.71% in 2014 (+16 bps year over year), while net interest margin (“NIM”) reached 1.87% in 2014 (+12 bps year over year), on higher average loan portfolio balances (+9% year over year) and lower average cost of funds (-26 bps year over year).  NIS & NIM in 4Q14 was 1.76% (+25 bps year over year; -1 bps quarter over quarter), and 1.92% (+23 bps year over year; -1 bps quarter over quarter), respectively.
• The Bank’s 2014 annualized return on average equity (“ROAE”) reached 12.0% versus 10.0% in 2013, while 4Q14 ROAE was 15.7% versus 11.7% in 3Q14 and 11.0% in the 4Q13.
• The Efficiency Ratio improved to 32% in 2014 (-9 pts. year over year), as net operating revenues grew 26% and operating expenses decreased 1%.  The 4Q14 Efficiency Ratio was 28% (-15 pts. year over year; -2 pts. quarter over quarter), as quarterly increases in net operating revenues (+62% year over year; +20% quarter over quarter), outpaced higher operating expenses (+7% year over year; +14% quarter over quarter).

Credit Growth & Quality:

• Average Commercial Portfolio balances amounted to $7.3 billion in 4Q14 (+11% year over year; +5% quarter over quarter), and$6.9 billion in year 2014 (+10% year over year), while the end-of-period Commercial Portfolio balance stood at $7.2 billion as of December 31, 2014 (+8% year over year).
• Credit quality remained healthy with a ratio of 0.06% of non-accrual loans to total loan portfolio balances as of December 31, 2014.  The ratio of the allowance for credit losses to the Commercial Portfolio ending balances was 1.20% at the end of year 2014 (+2 bps year over year; +1 bp quarter over quarter).  The credit provision to non-performing loan balances ratio was 21.4 times, compared to 21.1 times in 3Q14, and 25.0 times in 4Q13.

FINANCIAL SNAPSHOT

Recent Events

• Quarterly dividend payment:  At the Board of Director’s meeting held December 8, 2014, the Bank’s Board approved a quarterly common dividend of $0.385 per share corresponding to the fourth quarter 2014.  This represents an increase of $0.035 or 10%, compared to the previous quarterly dividend, underlining the Board’s commitment to continue its established dividend approach that reflects the development and growth of the Bank’s core business.  The dividend was paid on January 13, 2015, to stockholders registered as of January 5, 2015.

Ratings affirmed:  On November 12, 2014, Moody’s Investors Service affirmed the Bank’s credit rating at Baa2/P-2; with a “Stable” Outlook.