Bladex announces 1Q24 Net Profit of $51.3 Million, or $1.40 per share, expanding its annualized return on equity to 16.8% in 1Q24

Rhea-AI Summary

Bladex reported a strong performance in 1Q24 with a net profit of $51.3 million, leading to an annualized return on equity of 16.8%. The bank saw increased revenues, lower credit losses, and improved efficiency. Fee income surged by 97% YoY, while the credit portfolio reached a new high of $9,789 million. Liquidity position stood at $1,764 million, and capital adequacy ratios improved. Despite a director resignation, the bank announced a quarterly dividend payment and successful Annual Shareholders' Meeting results.

Positive

• Net Profit of $51.3 million in 1Q24, up 39% YoY
• Annualized Return on Equity at 16.8% in 1Q24
• Net Interest Income of $62.9 million in 1Q24, +20% YoY
• Fee income increased 97% YoY to $9.5 million in 1Q24
• Efficiency Ratio improved to 25.2% in 1Q24
• Credit Portfolio at $9,789 million, +12% YoY
• Deposit base grew to $4,724 million, +32% YoY
• Liquidity position at $1,764 million, 17% of total assets
• Tier 1 Basel III Capital and Regulatory Capital Adequacy Ratios increased
• Quarterly dividend payment of $0.50 per share approved for 1Q24
• Successful Annual Shareholders' Meeting results

Negative

• None.

Insights

Financial Analyst

Examining Bladex's first-quarter financial performance, the reported $51.3 million net profit signifies a robust 39% year-over-year growth. This positive outcome can be primarily attributed to increased net interest income, which rose 20% year-over-year to $62.9 million and an impressive surge in fee income of 97% compared to the previous year. The rise in fee income suggests an expansion in the bank's transactional capacity and client engagement within its letter of credit business. Equally noteworthy is the 303 basis points increase in annualized return on equity, which now stands at 16.8%, underscoring a strong recurrent operating performance. Reflecting on the bank's operational efficiency, the improvement in the efficiency ratio to 25.2% from last year is an indicator of the bank's ability to manage its expenses relative to its revenue generation. Such financial health can enhance investor confidence in Bladex's stock, considering the bank's reinforced capital position and favorable asset quality, as evidenced by a low level of impaired credits.

Market Analyst

Bladex's strategic maneuvers, such as new client onboarding and cross-selling, have resulted in a record high in commercial portfolio end-of-period balances, reaching $8,690 million, a 12% annual growth. Additionally, their continuous diversification and the notable 17% year-over-year increase in the investment portfolio contribute to a healthier balance sheet. From a market perspective, the expansion of the bank's credit portfolio and deposit base by 12% and 32% respectively, combined with a solid liquidity position of 17% of total assets, present a stable funding outlook. This could potentially affect the stock's valuation positively due to the implied reduced risk and increased potential for sustained growth. Furthermore, the increased Tier 1 and Regulatory Capital Adequacy Ratios provide a cushion against potential market volatility and enhance the bank's resilience, potentially making Bladex a more attractive investment for risk-averse investors.

Risk Management Expert

Focusing on asset quality, Bladex's report reveals that a considerable 97% of the credit portfolio is classified as low risk. The stable impaired credits ratio at 0.1% and a high reserve coverage of 6.9 times exhibit a prudent risk management approach. Additionally, the bank's growing Tier 1 Basel III Capital and Regulatory Capital Adequacy Ratios, which now stand at 16.3% and 13.7% respectively, indicate a strong capital buffer that can withstand potential credit losses. These ratios are critical for investors as they provide insight into the bank's overall risk profile and capital adequacy, which is important for understanding the potential volatility and security of their investments.

PANAMA CITY, April 18, 2024 /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, announced today its results for the First Quarter ("1Q24") ended March 31, 2024.

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").           

1Q24 Financial & Business Highlights

• Increased Profitability, with Net Profit of $51.3 million in 1Q24 (+39% YoY), fostered by higher total revenues and lower provisions for credit losses.
• Annualized Return on Equity ("ROE") reached 16.8% in 1Q24 (+303 bps YoY), on the back of strong recurrent operating results.
• Net Interest Income ("NII") stood at $62.9 million in 1Q24 (+20% YoY), driven by a 6 bps YoY increase in Net Interest Margin ("NIM") to 2.47% in 1Q24, benefited by solid lending spreads, efficient cost of funds and a proactive management of the short-tenor interest rate gap.
• Fee income increased 97% YoY to $9.5 million for 1Q24, deriving from improved results in the letter of credit business, benefitting from increased transactional volumes and cross-selling efforts in the Bank's letters of credit business, along with higher YoY fees from the transaction-based structuring and syndications business and other fees.
• Efficiency Ratio improved to 25.2% in 1Q24, on the back of solid total revenue levels (+23% YoY), compensating the 15% YoY increase in operating expenses.
• New all-time high Credit Portfolio at $9,789 million as of March 31, 2024 (+12 YoY).
  • Commercial Portfolio EoP balances reached a new record level of $8,690 million at the end of 1Q24 (+12% YoY), denoting a continued growth trend from new client onboarding and cross-selling strategy.
  • Investment Portfolio at $1,099 million (+17% YoY), mostly consisting of investment-grade securities held at amortized cost, further enhancing country and credit-risk exposure diversification and providing contingent liquidity funding.
• Healthy asset quality. Most of the credit portfolio (97%) is classified as low risk or Stage 1. At the end of 1Q24, impaired credits (Stage 3) remained unchanged at $10 million or 0.1% of total Credit Portfolio, with a reserve coverage of 6.9x.
• Sustained growth of deposits base, reaching $4,724 million at the end of 1Q24 (+32% YoY), representing 52% of the Bank's total funding sources. The Bank also counts with an ample and constant access to interbank and debt capital markets.
• Liquidity position at $1,764 million, or 17% of total assets as of March 31, 2024, mostly consisting of cash and due from banks, and placed with the Federal Reserve Bank of New York (87%).
• The Bank´s Tier 1 Basel III Capital and Regulatory Capital Adequacy Ratios increased to 16.3% and 13.7%, respectively, enhanced by the Bank's improved earnings generation.

 

Financial Snapshot
(US$ million, except percentages and per share amounts)	1Q24	4Q23	1Q23
Key Income Statement Highlights
Net Interest Income ("NII")	$62.9	$65.6	$52.6
Fees and commissions, net	$9.5	$10.1	$4.8
Gain on financial instruments, net	$0.2	$1.9	$1.7
Total revenues	$72.6	$77.8	$59.2
Provision for credit losses	($3.0)	($10.0)	($6.3)
Operating expenses	($18.3)	($21.4)	($15.9)
Profit for the period	$51.3	$46.4	$37.0
Profitability Ratios
Earnings per Share ("EPS") (1)	$1.40	$1.27	$1.02
Return on Average Equity ("ROE") (2)	16.8 %	15.5 %	13.7 %
Return on Average Assets ("ROA") (3)	1.9 %	1.8 %	1.6 %
Net Interest Margin ("NIM") (4)	2.47 %	2.62 %	2.41 %
Net Interest Spread ("NIS") (5)	1.80 %	1.92 %	1.82 %
Efficiency Ratio (6)	25.2 %	27.6 %	26.9 %
Assets, Capital, Liquidity & Credit Quality
Credit Portfolio (7)	$9,789	$9,532	$8,716
Commercial Portfolio (8)	$8,690	$8,521	$7,778
Investment Portfolio	$1,099	$1,011	$938
Total Assets	$10,688	$10,744	$9,249
Total Equity	$1,238	$1,204	$1,096
Market Capitalization (9)	$1,082	$904	$633
Tier 1 Capital to Risk-Weighted Assets (Basel III – IRB) (10)	16.3 %	15.4 %	15.3 %
Capital Adequacy Ratio (Regulatory) (11)	13.7 %	13.6 %	13.5 %
Total Assets / Total Equity (times)	8.6	8.9	8.4
Liquid Assets / Total Assets (12)	16.5 %	18.6 %	14.1 %
Credit-impaired Loans to Loan Portfolio (13)	0.1 %	0.1 %	0.5 %
Impaired Credits (14) to Credit Portfolio	0.1 %	0.1 %	0.4 %
Total Allowance for Losses to Credit Portfolio (15)	0.7 %	0.7 %	0.8 %
Total Allowance for Losses to Impaired credits (times) (15)	6.9	6.5	2.1

 

Recent Events

Quarterly dividend payment: The Board of Directors approved a quarterly common dividend of $0.50 per share corresponding to 1Q24. The cash dividend will be paid on May 15, 2024, to shareholders registered as of April 29, 2024.

Director resignation: Ms. Silvina Batakis, a Class "A" Director of Bladex's Board of Directors has tendered her resignation effective April 16, 2024. Ms. Batakis was a member of the Audit Committee and of the Nomination, Compensation and Operations Committee.

Annual Shareholders' Meeting Results: At the Annual Shareholders' Meeting held on April 17, 2024, in Panama City, Panama, shareholders:

• Elected Ms. Tarciana Paula Gomes Medeiros as Director representing the holders of Class "A" shares of the Bank's common stock,
• Reelected Mr. Miguel Heras as Director representing the holders of Class "E" shares of the Bank's common stock, and Mrs. Isela Costantini and Mrs. Alexandra M. Aguirre as Directors representing the holders of All Classes of shares of the Bank's common stock,
• Approved the Bank's audited consolidated financial statements for the fiscal year ended December 31, 2023,
• Ratified KPMG as the Bank's independent registered public accounting firm for the fiscal year ending December 31, 2024,
• 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

1. Earnings per Share ("EPS") calculation is based on the average number of shares outstanding during each period.
2. ROE refers to return on average stockholders' equity which is calculated based on unaudited daily average balances.
3. ROA refers to return on average assets which is calculated based on unaudited daily average balances.
4. NIM refers to net interest margin which constitutes to Net Interest Income ("NII") divided by the average balance of interest-earning assets.
5. 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.
6. Efficiency Ratio refers to consolidated operating expenses as a percentage of total revenues.
7. The Bank's "Credit Portfolio" includes gross loans at amortized cost (or the "Loan Portfolio"), securities at FVOCI and at amortized cost, gross of interest receivable and the allowance for expected credit losses, loan commitments and financial guarantee contracts, such as confirmed and stand-by letters of credit and guarantees covering commercial risk; and other assets consisting of customers' liabilities under acceptances.
8. The Bank's "Commercial Portfolio" includes gross loans at amortized cost (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.
9. Market capitalization corresponds to total outstanding common shares multiplied by market close price at the end of each corresponding period.
10. Tier 1 Capital ratio is calculated according to Basel III capital adequacy guidelines, and as a percentage of risk-weighted assets. Risk-weighted assets are estimated based on Basel III capital adequacy guidelines, utilizing internal-ratings based approach or "IRB" for credit risk and standardized approach for operational risk.
11. As defined by the Superintendency of Banks of Panama through Rules No. 01-2015 and 03-2016, based on Basel III standardized approach. The capital adequacy ratio is defined as the ratio of capital funds to risk-weighted assets, rated according to the asset's categories for credit risk. In addition, risk-weighted assets consider calculations for market risk and operating risk.
12. 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; as well as highly rated corporate debt securities (above 'A-'). Liquidity ratio refers to liquid assets as a percentage of total assets.
13. Loan Portfolio refers to gross loans at amortized cost, excluding interest receivable, the allowance for loan losses, and unearned interest and deferred fees. Credit-impaired loans are also commonly referred to as Non-Performing Loans or NPLs.
14. Impaired Credits refers to Non-Performing Loans or NPLs and non-performing securities at FVOCI and at amortized cost.
15. Total allowance for losses refers to allowance for loan losses plus allowance for loan commitments and financial guarantee contract losses and allowance for investment securities 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 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as: "anticipate", "intend", "plan", "goal", "seek", "believe", "project", "estimate", "expect", "strategy", "future", "likely", "may", "should", "will" and similar references to future periods. The forward-looking statements in this press release include the Bank's financial position, asset quality and profitability, among others. 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 coronavirus (COVID-19) pandemic and geopolitical events; 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. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. 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, and the United States of America, and a Representative License in Peru, 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, April 19, 2024 at 11:00 a.m. New York City time (Eastern Time). For those interested in participating, please click here to pre-register to our conference call or visit our website at http://www.bladex.com. Participants should register five minutes before the call is set to begin. The webcast presentation will be available for viewing and downloads on http://www.bladex.com. The conference call will become available for review one hour after its conclusion.

For more information, please access http://www.bladex.com or contact:

Mr. Carlos Daniel Raad 
Chief Investor Relations Officer 
Tel: +507 366-4925 ext. 7925 
E-mail: craad@bladex.com / ir@bladex.com

IR@bladex.com  
www.bladex.com/en/investors  

Carlos Raad
Chief investor Relations Officer
craad@bladex.com
Panama

Diego Cano
AVP investor Relations
dcano@bladex.com
+5076282-5856

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SOURCE Banco Latinoamericano de Comercio Exterior, S.A. (Bladex)

FAQ

What was Bladex's net profit in 1Q24?

Bladex reported a net profit of $51.3 million in 1Q24, showing a 39% increase year-over-year.

What was Bladex's annualized return on equity in 1Q24?

Bladex achieved an annualized return on equity of 16.8% in 1Q24, marking a 303 basis points increase from the previous year.

How much did Bladex's net interest income stand at in 1Q24?

Bladex's net interest income reached $62.9 million in 1Q24, reflecting a 20% increase year-over-year.

What was the efficiency ratio for Bladex in 1Q24?

Bladex's efficiency ratio improved to 25.2% in 1Q24, supported by solid total revenue levels.

What was the size of Bladex's credit portfolio at the end of 1Q24?

Bladex's credit portfolio reached $9,789 million as of March 31, 2024, showing a 12% increase year-over-year.

How much did Bladex's deposit base grow to by the end of 1Q24?

Bladex's deposit base grew to $4,724 million by the end of 1Q24, representing a 32% increase year-over-year.

What was Bladex's liquidity position as of March 31, 2024?

Bladex's liquidity position was at $1,764 million, equivalent to 17% of total assets, mainly composed of cash and due from banks.

What dividend was approved for Bladex for 1Q24?

The Board of Directors approved a quarterly common dividend of $0.50 per share for 1Q24, payable on May 15, 2024.

What were the results of Bladex's Annual Shareholders' Meeting held on April 17, 2024?

At the Annual Shareholders' Meeting, Ms. Tarciana Paula Gomes Medeiros was elected as Director, quarterly dividend payment approved, and KPMG ratified as the independent registered public accounting firm for 2024.