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1Q18 Earnings Presentation


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1Q18 Earnings Presentation

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1Q18 Earnings Presentation

  1. 1. 1Q18 Earnings Results Presentation April 20, 2018
  2. 2. “This presentation contains forward-looking statements. These statements are made under the “safe harbor” provisions established by the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. The forward-looking statements in this presentation reflect the expectations of the Bank’s management and are based on currently available data; however, actual experience with respect to these factors is subject to future events and uncertainties, which could materially impact the Bank’s expectations. A number of factors could cause actual performance and results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the anticipated growth of the Bank’s credit portfolio, including its trade finance portfolio; the continuation of the Bank’s preferred creditor status; the impact of increasing 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 credit losses; the need for additional provisions for credit losses; the Bank’s ability to achieve future growth, the Bank’s ability 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 large deposit withdrawals.” 2
  3. 3. 1 Lending Activity 1Q18 Highlights Financial Performance Overview  Short-term origination  Loan balances  +2% avg QoQ  5% end of period QoQ 2 Net Interest Spreads  Lower lending spreads on short-tenor origination drove net interest margin down to 1.68%  10bps QoQ  34bps YoY 3 Medium-term portfolio  Slow pace of medium-term origination in 1Q18. Expected to pick up speed in subsequent quarters 4 New Clients  Increasing effort to prospect new clients throughout the Region 5 Contingencies / Letters of credit  Fees from letters of credit and other contingencies stable at $3MM  3% QoQ  1% YoY 6 Syndications & Structuring  No new transactions booked during 1Q18. Robust pipeline for subsequent quarters 7 Credit Quality  No new NPLs in 1Q18  Quarterly increase in allowances for ECL. Specific provision for slow restructuring in Brazil 3 1.5x coverage ratio +$2.0 MM QoQ  +5% volume QoQ  $339 MM QoQ  $178 MM YoY
  4. 4.  New loan disbursements - continue with another strong quaterly performance Loan Origination and Maturities 4
  5. 5.  Lower QoQ and YoY comparisons for NII and NIM – impacted by decreases in lending margins Net Interest Income & Financial Margins 5
  6. 6. Fees & Other Income  Continued quarterly stable trend in the L/C and contingencies activity  Loss from reduced exposure related to a previously executed structured transaction 6
  7. 7. Operating Expenses  Declining trend in quarterly base of operating expenses ex-variable compensation  Total expense increase attributable to annual variable compensation expense paid in 1Q18 In US$ Million 1Q17 4Q17 1Q18 Salaries and other employee expenses, ex-variable compensation 5.4 6.9 5.3 Other operating expenses 4.5 5.8 4.2 Total operating expenses, ex- variable compensation 9.9 12.7 9.5 Variable compensation 1.3 0.4 4.8 Total Operating Expenses 11.2 13.1 14.3 Total Salaries & Other Employee Expenses 6.7 7.3 10.1 (1) Corresponds to annual variable compensation (1) 7
  8. 8. Commercial Portfolio Highlights  EOP - FIs @ 47% of total (+11 pts YoY), traditional client base  EOP Corporations @ 53% - Important industry diversification  Oil & Gas combined exposure at 19%  Increase on non-trade reflects renewed focus on lending to financial institutions  82% maturing within one year +5 pts YoY 8  Increased relative exposure in Colombia, offseting decrease in Peru
  9. 9.  NPL balances stable QoQ  NPL total reserve coverage of 1.5 times Credit Quality - NPL (*)(*) (*) Reserve refers to the allowance for expected credit losses on loans, loan commitments and financial guarantee contracts. 9
  10. 10.  EoP deposits balance closed at $2.8 B; with 70% placed by Central Banks Class “A” shareholders or designees  Avg. deposits stable at $3.2 B for 1Q18, representing 61% of avg. total funding (vs. 62% in the 4Q17);  Avg. short-term borrowings and debt +4 pts QoQ Average Funding Sources and Cost of Funds Deposits by Type of Client (As of March 31, 2018) Funding Sources by Geography (As of March 31, 2018) Funding Sources 10
  11. 11. Shareholder Returns  $0.385/share declared for 1Q18  Attractive dividend yield of 5.4% 11