4. Record Total Assets and Optimal Capital Allocation in Challenging Macro
Environment with Well-Diversified Commercial and Investment Portfolios
4
Total Assets
Investment Portfolio
Avg. Term to Maturity 2.4 years
$1Bn
+14%
YoY
46% Investment Grade 54% Non-Investment Grade
$8.1Bn
Colombia
Other N-IG2
Dominican Republic
Ecuador
Other IG3
Chile
Panama
Peru
Non Latam
Mexico
Guatemala
Brazil
5%
7%
9%
8%
12%
13%
12%
7%
10%
5%
9%
3%
Commercial Portfolio1 by Country
(1)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.
(2) Other N-IG: Costa Rica, Honduras, Paraguay, Argentina and Other Latam ≤ 1%. (3) Other IG:Trinidad & Tobago and Uruguay. (4) Other: Costa Rica, Dominican Republic, Non Latam: Japan, United Kingdom, Canada, Germany, Israel, Norway, Ireland and Italy.
Other4
United States 51%
18%
Chile 9%
Mexico 9%
Brazil 5%
Colombia 3%
Peru
3%
Panama
2%
2% 197 1% 139 3% 258 3% 294 5% 483
76%
6,749
76%
7,084
73%
6,760
72%
6,701
67%
6,821
12%
1,111
11%
1,048
11%
1,024
10%
940
10%
1,010
10%
867
11%
1,049
13%
1,242
14%
1,314
18%
1,820
8,925
9,320 9,284 9,249
10,134
2Q22 3Q22 4Q22 1Q23 2Q23
Other Loans, net Investment Portfolio, net Cash and due from banks
(USD millions, except for %)
5. Record Level of Deposits and Diverse Funding Structure Provide a
Solid Base for Balance Sheet Growth
5
Funding Sources Funding by Product
Deposits 38%
Yankee CDs 10%
Repos 5%
144a / Regs 5%
EMTN 3%
MXN-PAN Issuances 13%
Borrowings 21%
Syndicated Loans 5%
$8,530
2Q23
Deposits Evolution
1,537
2,069 2,298
1,573
1,500
1,776
3,110
3,569
4,074
2Q22 1Q23 2Q23
Client Deposits* Class A Shareholders
(*) Client deposits includes deposits from corporations and Financial institutions. (USD millions, except for %)
3,110 3,413 3,191
3,569
4,074
687
525
300
348
408
1,814
2,144
2,194
1,715
1,797
2,031
1,948
2,222 2,240
2,251
7,641
8,030 7,908 7,872
8,530
30-Jun-22 30-Sep-22 31-Dec-22 31-Mar-23 30-Jun-23
Long-term Borrowings & Debt, net Short-term Borrowings & Debt, net
Securities sold under repurchase agreement Deposits
6. Strong
Capitalization and
Constant Dividend
amidst Strategic
Focus on
Profitability
6
Capital
(1) As defined by the SBP, in which risk-weighted assets are calculated under the Basel Standardized Approach for Credit Risk. The minimum Regulatory Total Capital Adequacy
Ratio should be of no less than 8.0% of total risk-weighted assets. (2) 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.
Declared dividends
2Q23
$0.25
per share
1,019
1,049 1,069 1,096
1,128
12.9%
12.2%
13.2% 13.5% 13.6%
15.1%
14.4%
15.3% 15.3%
15.7%
2Q22 3Q22 4Q22 1Q23 2Q23
Equity Capital Adequacy Index Tier 1 Capital Ratio (Basel III)
1 2
(USD millions, except for %)
7. Strong Net Interest Margin and Spread Drive Robust Top-line
Performance
7
NIM
Rate of Interest-Earning Assets
Rate of Interest-Bearing Liabilities
Net Interest Spread Net Interest Margin
1.54%
1.77%
2.11%
2.41% 2.42%
2Q22 3Q22 4Q22 1Q23 2Q23
Net Interest Margin ("NIM")
2.98%
4.03%
5.52%
6.48%
6.99%
1.66%
2.60%
3.89%
4.66%
5.20%
2Q22 3Q22 4Q22 1Q23 2Q23
NIS
1.79%
NIS
1.82%
NIS
1.63%
NIS
1.43%
NIS
1.32%
1.30%
1.30%
8. NII Growth Driven by Strong Lending Spreads and the Positive Effect
of Higher Market Rates
8
(USD millions, except for %)
Increase in balance sheet volumes, combined with changes of assets and
liabilities composition (mix)
Effect of higher market rates on the share of the balance sheet funded by
equity
Base rate differential between assets and liabilities increased compared to
the first semester 2022, the result of slightly asset-sensitive repricing gap
Loan portfolio spread over base rate (3.02%) was 72 bps higher than the
first semester 2022
58.4
107.1
22.5
19.0
6M22
Higher lending spreads
Increased return on equity-funded balance
5.0
Base rate differencial
2.1
Changes in volume, mix and other effects
6M23
6M22 vs 6M23
+$48.7M
9. Growing Letters of
Credit Business
Drives Fee Income
9
Other Fees
Syndication Fees
Letters of Credit Fees
Total Fees
+52%
YoY
3.5 3.5 3.7 3.9
5.0
0.6
2.6
1.3
0.4
0.8
0.2
0.2
0.3
0.5
0.7
4.3
6.3
5.3
4.8
6.5
2Q22 3Q22 4Q22 1Q23 2Q23
(USD millions, except for %)
10. Stage 1
97.6%
$8.9Bn
Stage 2
2.3%
$205M
Stage 3
0.1%
$10M
Strong Asset
Quality, Low Credit
Risk and Robust
Reserve Coverage
10
(1) Includes allowance for expected credit losses on loans at amortized cost, on loan commitments and financial guarantees contracts, and on securities at amortized cost and
at fair value through other comprehensive income
$9.1Bn
Total Allowance for Credit
Losses to Impaired Credits
497%
Exposure by Stages
(USD millions, except for %) 30-Jun-22 30-Sep-22 31-Dec-22 31-Mar-23 30-Jun-23
Allowance for losses1
Balance at beginning of the period $55.2 $56.0 $61.8 $66.8 $72.4
Provisions (reversals) 0.8 4.8 5.8 6.3 4.7
Recoveries (write-offs) 0.0 1.0 (0.8) (0.7) (26.9)
End of period balance $56.0 $61.8 $66.8 $72.4 $50.2
Impaired Credits to Total Credit Portfolio 0.1% 0.1% 0.4% 0.4% 0.1%
(USD millions, except for %)
11. Strong Revenue
Growth Drive
Lower Cost-to-
Income Ratio
11
Opex & Efficiency Ratio
8.2 8.7
9.8 9.7 9.9
4.8
5.9
6.6 6.2 5.8
13.1
14.6
16.4 15.9 15.6
35.4%
31.6%
30.8%
26.9% 27.2%
2Q22 3Q22 4Q22 1Q23 2Q23
Salaries and other employee expenses Administrative & Other Expenses Efficiency Ratio
(USD millions, except for %)
12. Our 2023 outlook . . .
12
Capital: Core Equity Tier 1 ratio expected to range between 15% to 16%
NIM: Above 2022 levels at around 2.1- 2.4%, enhanced by increased corporate deposits and the full
impact of higher interest rates
Fees: Consistent growth of 8 – 10% trend from Letters of Credit Business and Syndications activity
Efficiency: Efficiency target ratio around 2022 levels, as higher revenues continue to offset
Investments in process improvements and technology
ROE: Sustained low double-digit returns. 11-13% in line with the strategic Plan
14. Disclaimer
14
This presentation 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 presentation 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.
