Bladex announces 2Q24 Net Profit of $50.1 Million, or $1.36 per share; annualized return on equity of 16.2% in 2Q24

Rhea-AI Summary

Bladex (NYSE: BLX) reported strong financial results for Q2 2024, with net profit of $50.1 million (+35% YoY) and earnings per share of $1.36. Key highlights include:

- Annualized ROE of 16.2% (+279 bps YoY)
- Net interest income of $62.8 million (+15% YoY)
- Fee income up 93% YoY to $12.5 million
- Efficiency ratio improved to 24.3%
- Record credit portfolio of $10.3 billion (+13% YoY)
- Commercial portfolio reached $9.2 billion (+13% YoY)
- Healthy asset quality with 95% of portfolio classified as low risk
- Strong capital position with 16.2% Tier 1 ratio

The bank declared a quarterly dividend of $0.50 per share payable on August 20, 2024.

Positive

• Net profit increased 35% year-over-year to $50.1 million in Q2 2024
• Annualized return on equity improved to 16.2%, up 279 basis points year-over-year
• Fee income surged 93% year-over-year to $12.5 million
• Credit portfolio reached a record high of $10.3 billion, up 13% year-over-year
• Commercial portfolio grew 13% year-over-year to $9.2 billion
• Efficiency ratio improved to 24.3% from 27.2% a year ago
• Tier 1 Capital ratio increased to 16.2% from 15.7% a year ago

Negative

• None.

Insights

Financial Analyst

The financial results reported by Bladex are quite impressive. A net profit of $50.1 million for 2Q24, marking a 35% YoY increase and $101.4 million for 6M24 (+37% YoY) indicate strong financial health and operational efficiency. The 16.2% annualized ROE is also noteworthy, reflecting effective use of equity capital. The improvement in the Net Interest Margin (NIM) to 2.43% and significant growth in fee income (+93% YoY for 2Q24) further underscore Bladex's strategic execution. The bank's efficiency ratio of 24.3% for 2Q24 is a testament to its cost management and revenue generation capabilities. Investors should consider these solid financial metrics as a sign of ongoing profitability and growth potential.

Market Research Analyst

Bladex's record-high credit portfolio of $10,336 million and the commercial portfolio reaching $9,201 million are indicative of robust market demand and successful client acquisition strategies. The bank’s diversification into investment-grade securities worth $1,134 million helps mitigate risk while providing liquidity. The 29% YoY increase in the deposit base to $5,259 million shows growing trust and reliance on Bladex by its clients. Additionally, the stability in the asset quality, with only 0.1% of the credit portfolio being impaired and a strong reserve coverage of 7.5x, signifies prudent risk management. For investors, these factors highlight the bank’s solid foundation and potential for long-term stability and growth.

Tech Expert

The substantial increase in Bladex’s fee income, particularly from the Project Finance & Infrastructure unit and syndications desk, points to the effective implementation of new technologies and processes. As the bank continues to enhance its digital infrastructure and client onboarding processes, these improvements will likely drive efficiency gains and revenue growth. The rise in cross-selling efforts facilitated by these technological advancements is also significant, contributing to higher lending spreads and volumes. For investors, this suggests that Bladex is not only expanding its client base but also deepening its relationships through technological innovation, an encouraging sign for future profitability.

PANAMA CITY, July 23, 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 Second Quarter ("2Q24") and six months ("6M24") ended June 30, 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").           

2Q24 & 6M24 Financial & Business Highlights

• Strong Profitability, with Net Profit of $50.1 million in 2Q24 (+35% YoY) and $101.4 million in 6M24 (+37% YoY), fostered by higher total revenues (+31% YoY in 2Q24 and +27% YoY in 6M24).
• Annualized Return on Equity ("ROE") reached 16.2% in 2Q24 (+279 bps YoY) and 16.5% in 6M24 (+291 bps YoY), on the back of strong recurrent operating results.
• Net Interest Income ("NII") stood at $62.8 million in 2Q24 (+15% YoY) and $125.6 million in 6M24 (+17% YoY), driven by 1 bp YoY increase in Net Interest Margin ("NIM") to 2.43% in 2Q24 and a 3 bps YoY increase to 2.45% in 6M24, resulting from a successful strategy execution reflected by higher lending spreads and volumes, new client on-boarding, cross selling efforts and efficient cost of funds management.
• Fee income increased 93% YoY to $12.5 million for 2Q24 and 94% YoY to $22.0 million in 6M24, driven by stronger fees in each of the Bank's business lines, with a robust performance in our newly formed Project Finance & Infrastructure unit as well as in our syndications desk, along with increased fees from our off-balance sheet business, continuing to add new clients and capturing very profitable punctual opportunities.
• Efficiency Ratio improved to 24.3% in 2Q24 and 24.7% in 6M24, on the back of solid total revenue levels, compensating the YoY increase in operating expenses (+17% YoY in 2Q24 and +16% YoY in 6M24).
• New all-time high Credit Portfolio at $10,336 million as of June 30, 2024 (+13% YoY).
  • Commercial Portfolio EoP balances reached a new record level of $9,201 million at the end of 2Q24 (+13% YoY), denoting a continued demand and business growth from new client onboarding and product cross-selling strategy.
  • Investment Portfolio at $1,134 million (+13% 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 (95%) is classified as low risk or Stage 1. At the end of 2Q24, impaired credits (Stage 3) remained unchanged at $10 million or 0.1% of total Credit Portfolio, with a reserve coverage of 7.5x.
• Sustained growth of deposit base, reaching a new record level of $5,259 million at the end of 2Q24 (+29% YoY), representing 58% of the Bank's total funding sources. The Bank also counts on an ample and constant access to interbank and debt capital markets.
• Liquidity position at $1,899 million, or 17% of total assets as of June 30, 2024, mostly consisting of cash and due from banks, and placed with the Federal Reserve Bank of New York (79%).
• The Bank´s Tier 1 Basel III Capital and Regulatory Capital Adequacy Ratios increased to 16.2% and 14.0%, respectively, enhanced by the Bank's improved earnings generation.

 

Financial Snapshot
(US$ million, except percentages and per share amounts)	2Q24	1Q24	2Q23	6M24	6M23
Key Income Statement Highlights
Net Interest Income ("NII")	$62.8	$62.9	$54.5	$125.6	$107.1
Fees and commissions, net	$12.5	$9.5	$6.5	$22.0	$11.3
(Loss) gain on financial instruments, net	($0.4)	$0.2	($3.6)	($0.2)	($1.9)
Total revenues	$75.0	$72.6	$57.4	$147.6	$116.6
Provision for credit losses	($6.7)	($3.0)	($4.7)	($9.7)	($11.0)
Operating expenses	($18.2)	($18.3)	($15.6)	($36.5)	($31.5)
Profit for the period	$50.1	$51.3	$37.1	$101.4	$74.0
Profitability Ratios
Earnings per Share ("EPS") (1)	$1.36	$1.40	$1.02	$2.76	$2.03
Return on Average Equity ("ROE") (2)	16.2 %	16.8 %	13.4 %	16.5 %	13.6 %
Return on Average Assets ("ROA") (3)	1.9 %	1.9 %	1.6 %	1.9 %	1.6 %
Net Interest Margin ("NIM") (4)	2.43 %	2.47 %	2.42 %	2.45 %	2.42 %
Net Interest Spread ("NIS") (5)	1.74 %	1.80 %	1.79 %	1.77 %	1.80 %
Efficiency Ratio (6)	24.3 %	25.2 %	27.2 %	24.7 %	27.0 %
Assets, Capital, Liquidity & Credit Quality
Credit Portfolio (7)	$10,336	$9,789	$9,114	$10,336	$9,114
Commercial Portfolio (8)	$9,201	$8,690	$8,114	$9,201	$8,114
Investment Portfolio	$1,134	$1,099	$1,000	$1,134	$1,000
Total Assets	$10,907	$10,688	$10,134	$10,907	$10,134
Total Equity	$1,264	$1,238	$1,128	$1,264	$1,128
Market Capitalization (9)	$1,091	$1,082	$804	$1,091	$804
Tier 1 Capital to Risk-Weighted Assets (Basel III – IRB) (10)	16.2 %	16.3 %	15.7 %	16.2 %	15.7 %
Capital Adequacy Ratio (Regulatory) (11)	14.0 %	13.7 %	13.6 %	14.0 %	13.6 %
Total Assets / Total Equity (times)	8.6	8.6	9.0	8.6	9.0
Liquid Assets / Total Assets (12)	17.4 %	16.5 %	17.3 %	17.4 %	17.3 %
Credit-impaired Loans to Loan Portfolio (13)	0.1 %	0.1 %	0.1 %	0.1 %	0.1 %
Impaired Credits (14) to Credit Portfolio	0.1 %	0.1 %	0.1 %	0.1 %	0.1 %
Total Allowance for Losses to Credit Portfolio (15)	0.7 %	0.7 %	0.6 %	0.7 %	0.6 %
Total Allowance for Losses to Impaired credits (times) (15)	7.5	6.9	5.0	7.5	5.0

 

Recent Events

Quarterly dividend payment: The Board of Directors approved a quarterly common dividend of $0.50 per share corresponding to 2Q24. The cash dividend will be paid on August 20, 2024, to shareholders registered as of August 5, 2024.

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 and loans at FVOCI (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 and loans at FVOCI (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 consist of total cash and due from banks, less time deposits with original maturity over 90 days and other restricted deposits, as well as corporate debt securities rated A- or above. Liquidity ratio refers to liquid assets as a percentage of total assets.
13. Loan Portfolio refers to gross loans at amortized cost and gross loans at FVOCI, 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 Wednesday, July 24, 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

 

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

FAQ

What was Bladex's (BLX) net profit in Q2 2024?

Bladex reported a net profit of $50.1 million in Q2 2024, representing a 35% increase year-over-year.

What was Bladex's (BLX) earnings per share in Q2 2024?

Bladex's earnings per share in Q2 2024 were $1.36.

How much did Bladex's (BLX) fee income grow in Q2 2024?

Bladex's fee income increased by 93% year-over-year to $12.5 million in Q2 2024.

What was Bladex's (BLX) credit portfolio size as of June 30, 2024?

Bladex's credit portfolio reached a record high of $10.336 billion as of June 30, 2024, representing a 13% increase year-over-year.

What dividend did Bladex (BLX) declare for Q2 2024?

Bladex declared a quarterly dividend of $0.50 per share for Q2 2024, payable on August 20, 2024.