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Blx webcast presentation 4 q20 finalv2

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Blx webcast presentation 4 q20 finalv2

  1. 1. 1 Banco Latinoamericano de Comercio Exterior, S.A. (“Bladex”) 4Q20 Earnings Results Presentation February 12, 2021
  2. 2. 2 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 government actions intended to limit its spread; 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.
  3. 3. 3 ​ ​ ​ ​ 4,566 (1,907) 2,253 4,911 520 (252) 370 639 30-Sep-20 Maturities * Disbursements 31-Dec-20 (USD millions, except for %) - QoQ +9% growth QoQ in Commercial Portfolio, maintaining a well-diversified exposure in lower risk countries and defensive sectors ▪ 59% in Investment Grade countries ▪ 75% maturing in less than a year (+2pp. QoQ) ▪ Exposures in top-tier clients (FIs & Corporate industry leaders) ▪ Still robust credit quality with $11 million in NPLs Commercial Portfolio growth of 9% quarter-on-quarter, leveraging on increased demand towards year-end and on Bladex’s broad regional reach (*) Includes prepayments and sales 5,087 (2,159) +2,623 5,551 L+ 2.45% L+ 2.15% Loan Portfolio Average Interest Rate Total L+ 1.82% L+ 2.27% Contingencies Loans 9%
  4. 4. 4 ​ ​ ​ ​ 4,566 (1,907) 2,253 4,911 520 (252) 370 639 30-Sep-20 Maturities * Disbursements 31-Dec-20 (USD millions, except for %) - QoQ (*) Includes prepayments and sales 5,087 (2,159) +2,623 5,551 L+ 2.45% L+ 2.15% Loan Portfolio Average Interest Rate Total L+ 1.82% L+ 2.27% Contingencies Loans Commercial Portfolio growth was achieved by a solid 17% increase in credit disbursements in 4Q20, while sustaining preceding quarterly trend in collecting virtually all loan maturities Strong level of disbursements ▪ > $8.0 billion in lending origination in 2020 ▪ Continued risk assessment and close contact with clients Collection of virtually all scheduled maturities ▪ Denotes the high quality of borrowers and short-term nature of the portfolio 99% collected 17%
  5. 5. 5 3% 1% 2% 2% 3% 2% 3% 4% 3% 4% 4% 4% 6% 6% 17% 18% 1% 1% 3% 3% 7% 5% 3% 6% 9% 9% 10% 10% 12% 11% 14% 14% 5,087 5,551 - 1,000 2,000 3,000 4,000 5,000 - 1,000 2,000 3,000 4,000 5,000 30-Sep-20 31-Dec-20 Colombia Mexico Chile Non-Latam Peru Panama T. & Tobago Uruguay Brazil Guatemala Dominican Republic Costa Rica Ecuador Argentina Paraguay Other Latam ≤ 1% Commercial Portfolio by Country As of Dec20 59% IG 41% Non-IG 59% IG 41% Non-IG During 4Q20 origination continued mainly in lower risk jurisdictions, preserving a robust credit quality and diversification Peru Colombia Brazil Non-LatAm Argentina 9% +376% in Oil & Gas ( Downstream) +7% in Financial institutions In transactions with risk cover provided by OECD-based entities +24% in Financial institutions -33% since the onset of Covid-19 (1Q20) 3% 1% 2% 2% 3% 2% 3% 4% 3% 4% 4% 4% 6% 6% 17% 18% 1% 1% 3% 3% 7% 5% 3% 6% 9% 9% 10% 10% 12% 11% 14% 14% 5,087 5,551 - 1,000 2,000 3,000 4,000 5,000 30-Sep-20 31-Dec-20 Colombia Mexico Chile Non-Latam Peru Panama T. & Tobago Uruguay Brazil Guatemala Dominican Republic Costa Rica Ecuador Argentina Paraguay Other Latam ≤ 1% 3% 1% 2% 2% 3% 2% 3% 4% 3% 4% 4% 4% 6% 6% 17% 18% 1% 1% 3% 3% 7% 5% 3% 6% 9% 9% 10% 10% 12% 11% 14% 14% 5,087 5,551 - 1,000 2,000 3,000 4,000 5,000 30-Sep-20 31-Dec-20 Colombia Mexico Chile Non-Latam Peru Panama T. & Tobago Uruguay Brazil Guatemala Dominican Republic Costa Rica Ecuador Argentina Paraguay Other Latam ≤ 1% QoQ variation $184MM, +135% $62MM, +9% $35MM, +8% $134MM, +15% $15MM, -10%
  6. 6. 6 5% 4% 1% 1% 2% 2% 2% 2% 2% 2% 2% 2% 3% 2% 3% 3% 3% 3% 4% 3% 5% 3% 5% 6% 6% 6% 4% 7% 53% 54% 5,087 5,551 - 1,000 2,000 3,000 4,000 5,000 - 1,000 2,000 3,000 4,000 5,000 30-Sep-20 31-Dec-20 Financial institutions Oil and gas (Downstream) Electric power Food and beverage Metal manufacturing Other services Oil and gas (upstream) Oil and gas (Integrated) Other manufacturing industries Coffee Grains and oilseeds Mining Retail trade Sugar Other Industries <1% Commercial Portfolio by Industry As of Dec20 9% Financial Institutions Oil and Gas (Downsteam) Airlines Food and Beverage Sugar ≈ Similarly, origination in 4Q20 was focused on defensive sectors. Our exposure to higher risk sectors has steadily decreased since the onset of Covid-19 ≈ Main financial institutions of each country; systemic 94% of the quarterly increase in Investment Grade countries Top Tier clients in LatAm countries -67% since the onset of Covid-19 (1Q20) -43% since the onset of Covid-19 (1Q20) QoQ variation $308MM, +12% $185MM, +91% $32MM, +12% − +$3MM, +4%
  7. 7. 7 1% 1% 1% 2% 2% 82% 78% 68% 72% 78% 1% 1% 1% 4% 6% 16% 20% 30% 22% 14% 7,250 6,823 6,627 6,311 6,289 -1,000,000 -800,000 -600,000 -400,000 -200,000 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 31-Dec-19 31-Mar-20 30-Jun-20 30-Sep-20 31-Dec-20 Other Loans Investment Portfolio Cash and due from banks (USD millions, except for %) - EoP Total Assets 3Q20 was clearly an Inflection Point in terms of asset composition, ending the year with a mix that is closer to historical levels ✓ The Bank continued loan portfolio growth as of 4Q20 (+$350 MM or 8% QoQ) after holding higher liquidity levels in previous quarters ✓ The Bank has gradually reduced its cash position, still remaining at a robust level of $864 million; mainly placed with the Federal Reserve Bank of New York. ✓ Higher Investment Portfolio, of which $202 million were new corporate debt securities classified as HQLA by Basel III standards (+$162 MM or 69% QoQ), complementing the Bank’s Liquidity position
  8. 8. 8 0 107 95 202 96 32 65 193 96 395 0 50 100 150 200 250 300 350 400 450 0 50 100 150 200 250 300 350 400 450 30-Jun-20 Q3 Q4 31-Dec-20 52% 18% 7% 13% 10% AAA AA+ AA A+ A 3% 32% 27% 10% 7% 21% A BBB BBB- BB+ BB BB- The Bank significantly increased its bond portfolio during 2H2020 to $395 million. By year-end it was evenly split between a HQLA portfolio aimed at enhancing the return on liquid assets and a credit portfolio of Latin American names conceived as a complement to the Bank’s Commercial Portfolio Investment Portfolio (USD millions) - EoP Credit Rating As of Dec20 Credit Investment Portfolio HQLA Investment Portfolio (*) 0.37% Avg. Return 1.8 years Tenor 2.58% Avg. Return 1.7 years Tenor 100% IG 62% IG 38% Non - IG (*) HQLA refers to “High Quality Liquid Assets” in accordance with the specifications of the Basel Committee.
  9. 9. 9 25% 26% 25% 32% 31% 27% 30% 23% 8% 8% 48% 44% 52% 60% 61% 6,067 5,659 5,524 5,133 5,135 -80,000 -70,000 -60,000 -50,000 -40,000 -30,000 -20,000 -10,000 0 0% 20% 40% 60% 80% 100% 31-Dec-19 31-Mar-20 30-Jun-20 30-Sep-20 31-Dec-20 Deposits Repos and Short-term borrowings and debt Long-term borrowings and debt, net The combination of an increasing participation of deposits over total funding and new debt capital markets transactions has further reinforced the resiliency of the Bank’s funding base Funding Structure (USD millions, except for %) - EoP ✓ Deposits continued to grow (+9% YOY) and substantially increased their share in the Bank’s total funding base ✓ Bladex’s new Yankee CD program has been consistently gaining traction, reaching $ 452 million by the end of 2020 ✓ Class A shareholders continued to support the Bank through their deposit placements, which amounted to 50% of total deposits ✓ During 2020 the Bank further reinforced the stability of its funding base through new medium term funding transactions ✓ Bond issuances, both public and private, and syndications attracted investors from the US, Europe, Asia and Latin America ✓ The Bank reduced its reliance on funding from correspondent banks, which by the end of 2020 amounted to less than 8% of total funding ✓ Nevertheless, Bladex maintains a fluent access to a wide network of correspondent banks from the Americas, Europe and Asia
  10. 10. 10 Stable QoQ trend in quarterly net income and returns. Annual results impacted by Bladex’s defensive approach to favor liquidity over loan growth during most part of the year, compensated by decreased expenses and reversals of credit reserves from loan collections and improved asset quality Quarterly Annual (USD millions, except %) 4Q19 3Q20 4Q20 CHANGE QoQ % 2019 2020 CHANGE YoY % Statement of Profit or Loss Net Interest Income ("NII") $26.9 $22.6 $22.3 -1% $109.5 $92.5 -16% Fees and commissions, and other income, net $6.6 $3.0 $3.0 1% $18.5 $11.5 -38% Loss on financial instruments, net ($2.0) ($0.4) ($0.1) 89% ($1.4) ($4.8) -248% Total revenues $31.4 $25.2 $25.3 0% $126.7 $99.2 -22% Reversal (provision) for credit losses $1.9 ($1.5) $0.3 120% ($0.4) $1.5 440% Reversal (impairment) on non- financial assets $0.0 $0.1 $0.3 111% $0.5 $0.3 -41% Operating expenses ($11.3) ($8.3) ($10.2) -22% ($40.7) ($37.3) 8% Profit for the period $22.1 $15.4 $15.7 2% $86.1 $63.6 -26% Return on Average Equity (“ROAE”) 8.7% 6.0% 6.1% 8.6% 6.2% Return on Average Assets (“ROAA”) 1.3% 1.0% 1.0% 1.4% 1.0% Efficiency Ratio 35.9% 33.1% 40.2% 32.1% 37.6%
  11. 11. 11 Decreased annual NII and NIM on lower average loans and increased average cash position, coupled with the impact of lower market rates decreasing equity yield. Partly compensated by a positive trend in net lending spreads and by a faster repricing of liabilities in a decreasing market rate environment Rate Effect Volume Effect NII: -$0.3MM QoQ to $22.3MM NIM: -5bps QoQ to 1.37% NIS: -2bps QoQ to 1.17% 4Q20 NII: -$17.1MM YoY to $92.5MM NIM: -33bps YoY to 1.41% NIS: -6bps YoY to 1.13% FY20 4.19% 3.94% 3.56% 3.31% 3.04% 2.69% 2.41% 1.57% 1.26% 1.11% 1.79% 1.22% 0.19% 0.20% 0.16% 3.40% 3.39% 3.39% 2.64% 1.51% 0.00 % 2.00 % 4.00 % 6.00 % 8.00 % 10 . 0 0% 12 . 0 0% 14 . 0 0% - 2. 00% - 1. 00% 0. 00 % 1. 00 % 2. 00 % 3. 00 % 4. 00 % 5. 00 % 4Q19 1Q20 2Q20 3Q20 4Q20 1.50% 1.53% 1.99% 1.93% 2.05% Rate Change -0.27% -0.15% -0.04% NII Impact -$3.2MM +$1.5MM -$0.2MM Loans Financial Liabilities Cash and due from banks Interest Rate Evolution Investment Portfolio -1.13% -$1.0MM -1.11% -1.51% -1.90% -$55.4MM +$76.1MM -$28.9MM -1.31% -$2.1MM Rate Change NII Impact 4Q20 vs 3Q20 FY20 vs FY19 -$2.8MM -$10.3MM Volume Change NII Impact +$2.5MM +$1.2MM +$1.4MM -$0.1MM +$137MM +$202MM -$212MM Average Balances Loans * Financial Liabilities Investment Portfolio Cash and due from banks +$0.1MM +$145MM * Gross of unearned interest and deferred fees. 1,526 337 5,441 4,619 1,737 135 5,297 4,481 3Q20 4Q20 3Q20 4Q20 3Q20 4Q20 4Q20 3Q20 Volume Change NII Impact -$6.8MM -$25.5MM +$2.4MM +$16.8MM -$573MM +$67MM +$747MM -$0.5MM +$252MM 4Q20 vs 3Q20 FY20 vs FY19
  12. 12. 12 (USD million) 31-Dec-19 31-Mar-20 30-Jun-20 30-Sep-20 31-Dec-20 Allowance for losses Balance at beginning of the period $104.4 $102.5 $102.5 $47.8 $44.9 Provisions (reversals) (1.9) (0.1) (2.6) 1.5 (0.3) Write-offs, net of recoveries 0.0 0.1 (52.1) (4.4) 0.0 End of period balance $102.5 $102.5 $47.8 $44.9 $44.6 62 0 11 0 10 20 30 40 50 60 70 80 31-Dec-19 30-Sep-20 31-Dec-20 95% 94% 94% 4% 6% 6% 1% 0% 0% 6,582 5,320 5,946 -1,000,000 -800,000 -600,000 -400,000 -200,000 0 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 31-Dec-19 30-Sep-20 31-Dec-20 The level of allowances for credit losses reflect Bladex’s sound asset quality, with 94% of credits classified as Stage 1 (low risk) under IFRS 9, and credit impaired loans representing 0.2% of total loan portfolio Allowance for Credit Losses Credit Impaired Loans (USD millions, except for %) (USD millions, except for %) Total Allowance for Losses to Credit Portfolio 1.56% 0.75% Allowance for Losses to Stages 1 + 2 0.73% 0.67% 0.84% 0.84% Allowance for Losses 102.5 44.6 44.9 Stage 1 (low risk) Stage 2 (increased risk) Stage 3 (credit impaired) Credit Portfolio (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. 1 Total allowance for losses to Credit impaired loans Credit impaired loans to Loan Portfolio 1.7x 4.2x n.a. 1.0% 0.2% 0.0% ✓ NPLs as of 31-Dec-20 correspond to a loan in the retail trade business At and for the three months ended ✓ Write-offs during 2020 relate to the sale of troubled loans for which individual reserves were previously allocated.
  13. 13. 13 “We believe that our 40-year experience in the Region, including several negative credit cycles, and our good understanding of the impacts and macroeconomic dynamics in every country, play to our advantage. We are committed to continue to support our clients, for whom we have been long-standing allies.” -Jorge Salas, CEO “I truly believe that 2020 was a very good year for Bladex, given the circumstances – taking advantage of the levers of our business model to protect the quality of our assets, while continuing to soundly originate business across the region, and making the best of the liquidity and rate environment on the liability side. Although the pandemic continues to pose significant challenges for the Region, we stand well prepared to navigate 2021.” -Jorge Salas, CEO

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