Bladex announces 4Q23 Net Profit of $46.4 Million, or $1.27 per share, reaching an annual Net Profit of $166.2 Million, or $4.55 per share
- Strong financial performance with a record net profit of $166.2 million in FY23.
- 50% YoY increase in net profit for 4Q23.
- 58% YoY growth in Net Interest Income.
- 64% YoY increase in fee income.
- Healthy asset quality with low credit risk portfolio.
- Stable liquidity position with $1,999 million in liquidity.
- None.
Insights
The recent financial results from Banco Latinoamericano de Comercio Exterior, S.A. (Bladex) reflect a substantial growth in profitability, with a net profit increase of 50% YoY for the fourth quarter and 81% for the full year. This significant improvement can be attributed to both an increase in total revenues and successful strategic execution. Notably, the Net Interest Income (NII) saw a growth of 58% YoY, contributing to the expansion of the Net Interest Margin (NIM) by 78 basis points YoY. Such growth in NII suggests that Bladex has effectively capitalized on higher average volumes and rates, which is indicative of a strong lending environment and possibly an optimized interest rate strategy.
The Return on Equity (ROE) has also seen a notable increase, which is significant for shareholders as it indicates that the bank is generating more profit from every dollar of equity. The reported ROE of 14.7% for FY23 is well above the industry average, signaling strong operational efficiency and profitability. Additionally, the efficiency ratio improved, staying below 30%, which is a positive sign of cost control despite the increase in operating expenses related to strategic initiatives. This ratio is crucial as it measures the cost of generating revenue and a lower ratio typically signifies better performance.
Bladex's performance should be seen in the context of the broader economic conditions in Latin America and the Caribbean. The bank's record levels of fee income, driven by loan syndication and letter of credit business, suggest robust trade activity and demand for financial services in the region. The increase in fee income by 64% YoY is particularly impressive and may reflect greater regional economic integration and trade finance activity. Furthermore, the all-time high Credit Portfolio indicates that Bladex has successfully expanded its lending activities, which is a positive indicator for regional economic growth.
Moreover, the stability of Bladex's Investment Portfolio and the high quality of its asset base, with 96% classified as low risk, provide confidence in the bank's risk management practices. The bank's liquidity position, with 19% of total assets in liquid form, ensures resilience against potential market fluctuations. This strong liquidity, coupled with a diversified funding structure, positions Bladex favorably for continued operations and growth opportunities in 2024.
The capital adequacy ratios reported by Bladex, including a Tier 1 Basel III Capital Ratio of 15.4% and a Regulatory Capital Adequacy Ratio of 13.6%, are well above the Basel III minimum requirements. This indicates a strong capital buffer and financial stability, which is particularly important in the event of economic downturns. Such robust capitalization can support future growth and provide assurance to investors and regulators alike.
The bank's focus on maintaining a healthy asset quality and diversified credit-risk exposure is also a prudent strategy in the context of potential economic uncertainties. With a mere 0.1% of the credit portfolio being impaired and a reserve coverage of 6.5 times, Bladex demonstrates a commitment to maintaining a strong balance sheet. This level of provisioning is commendable and suggests that the bank is well-prepared to absorb potential credit losses.
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").
4Q23 & FY23 Financial & Business Highlights
- Sustained increase in Profitability, with Net Profit of
$46.4 million 50% YoY), resulting in an annual record level of$166.2 million 81% YoY), fostered by higher total revenues on the Bank's successful strategy execution and favorable market conditions. - Annualized Return on Equity ("ROE") stood at
15.5% in 4Q23 (+388 bps YoY) and14.7% in FY23 (+573 bps YoY), on the back of record recurrent operating results. - Record level Net Interest Income ("NII"), increasing for eleventh consecutive quarter at
$65.6 million 33% YoY), reaching$233.2 million 58% YoY) in FY23, driven by higher average volumes and rates. Net Interest Margin ("NIM") expanded to2.62% in 4Q23 (+51 bps YoY) and to2.49% in FY23 (+78 bps YoY). - Fee income totaled
$10.1 million 91% YoY), boosting fee income to record levels of$32.5 million 64% YoY) in FY23, deriving from higher loan syndication fee activity and solid commissions from the letter of credit business. - Efficiency Ratio stood at
27.6% in 4Q23 and27.2% in FY23, as higher total revenues overcompensated increases in operating expenses (+31% YoY in 4Q23; +32% YoY in FY23) mostly related to the Bank's strategy and focus on strengthening its execution capabilities. - All-time high Credit Portfolio at
$9,532 million 9% YoY).- Commercial Portfolio EoP balances also reached a new record level of
$8,521 million 11% YoY), as new client onboarding and sustained cross-selling efforts delivered strong business volumes. - Investment Portfolio relatively stable at
$1,011 million
- Commercial Portfolio EoP balances also reached a new record level of
- Healthy asset quality. Most of the credit portfolio (
96% ) is classified as low risk or Stage 1. At the end of 4Q23, impaired credits (Stage 3) remained unchanged at$10 million 0.1% of total Credit Portfolio, with a reserve coverage of 6.5x. - Record deposits level in 4Q23, reaching
$4,408 million 38% YoY), coupled with ample and constant access to interbank and debt capital markets, denotes the Bank's sound and diversified funding structure. - Liquidity position at
$1,999 million 19% of total assets as of December 31, 2023, mostly consisting of cash and due from banks placed with the Federal Reserve Bank ofNew York (94% ). - The Bank´s Tier 1 Basel III Capital and Regulatory Capital Adequacy Ratios stood at
15.4% and13.6% , respectively, enhanced by the Bank's earning generation and risk appetite.
Financial Snapshot | |||||
(US$ million, except percentages and per share amounts) | 4Q23 | 3Q23 | 4Q22 | 2023 | 2022 |
Key Income Statement Highlights | |||||
Net Interest Income ("NII") | |||||
Fees and commissions, net | |||||
Gain (loss) on financial instruments, net | ( | ( | ( | ||
Total revenues | |||||
Provision for credit losses | ( | ( | ( | ( | ( |
Operating expenses | ( | ( | ( | ( | ( |
Profit for the period | |||||
Profitability Ratios | |||||
Earnings per Share ("EPS") (1) | |||||
Return on Average Equity ("ROE") (2) | 15.5 % | 15.9 % | 11.6 % | 14.7 % | 8.9 % |
Return on Average Assets ("ROA") (3) | 1.8 % | 1.8 % | 1.3 % | 1.7 % | 1.0 % |
Net Interest Margin ("NIM") (4) | 2.62 % | 2.48 % | 2.11 % | 2.49 % | 1.71 % |
Net Interest Spread ("NIS") (5) | 1.92 % | 1.83 % | 1.63 % | 1.84 % | 1.39 % |
Efficiency Ratio (6) | 27.6 % | 27.2 % | 30.8 % | 27.2 % | 33.1 % |
Assets, Capital, Liquidity & Credit Quality | |||||
Credit Portfolio (7) | |||||
Commercial Portfolio (8) | |||||
Investment Portfolio | |||||
Total Assets | |||||
Total Equity | |||||
Market Capitalization (9) | |||||
Tier 1 Capital to Risk-Weighted Assets (Basel III – IRB) (10) | 15.4 % | 15.4 % | 15.3 % | 15.4 % | 15.3 % |
Capital Adequacy Ratio (Regulatory) (11) | 13.6 % | 13.6 % | 13.2 % | 13.6 % | 13.2 % |
Total Assets / Total Equity (times) | 8.9 | 8.7 | 8.7 | 8.9 | 8.7 |
Liquid Assets / Total Assets (12) | 18.6 % | 15.3 % | 13.7 % | 18.6 % | 13.7 % |
Credit-impaired Loans to Loan Portfolio (13) | 0.1 % | 0.1 % | 0.4 % | 0.1 % | 0.4 % |
Impaired Credits (14) to Credit Portfolio | 0.1 % | 0.1 % | 0.4 % | 0.1 % | 0.4 % |
Total Allowance for Losses to Credit Portfolio (15) | 0.7 % | 0.6 % | 0.8 % | 0.7 % | 0.8 % |
Total Allowance for Losses to Impaired credits (times) (15) | 6.5 | 5.6 | 1.9 | 6.5 | 1.9 |
"2023 was an extraordinary year for Bladex. Simply put, no matter which KPI you look at, last year was, without any doubt, the best in our Bank's history.
Our credit book grew
On the profitability front, I am pleased to report that Net Interest Income amounted to
Net income for the year soared
Mr. Jorge Salas
Bladex's Chief Executive Officer
Recent Events
Quarterly dividend payment: The Board of Directors approved a quarterly common dividend of
Ratings updates: On November 28, 2023, Moody's Investors Service affirmed all Bladex's ratings, including the "Baa2" long-term foreign currency deposit rating and "Prime-2" short-term foreign currency deposit rating, and changed the outlook on Bladex's long-term foreign currency ratings to stable from negative.
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
- Earnings per Share ("EPS") calculation is based on the average number of shares outstanding during each period.
- ROE refers to return on average stockholders' equity which is calculated based on unaudited daily average balances.
- ROA refers to return on average assets which is calculated based on unaudited daily average balances.
- NIM refers to net interest margin which constitutes to Net Interest Income ("NII") divided by the average balance of interest-earning assets.
- 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.
- Efficiency Ratio refers to consolidated operating expenses as a percentage of total revenues.
- 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.
- 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.
- Market capitalization corresponds to total outstanding common shares multiplied by market close price at the end of each corresponding period.
- 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.
- 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. - 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.
- 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.
- Impaired Credits refers to Non-Performing Loans or NPLs and non-performing securities at FVOCI and at amortized cost.
- 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
Bladex is listed on the NYSE in
Conference Call Information
There will be a conference call to discuss the Bank's quarterly results on Friday, February 23, 2023 at 10:00 a.m.
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
Diego Cano
AVP investor Relations
dcano@bladex.com
+5076282-5856
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SOURCE Banco Latinoamericano de Comercio Exterior, S.A. (Bladex)
FAQ
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