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Blx webcast presentation 4q18

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Blx 4q18 and full year 2018 results presentation

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Blx webcast presentation 4q18

  1. 1. 4Q18 and Full Year 2018 Results Presentation February 28, 2019
  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. The forward-looking statements in this presentation include the growth of the credit portfolio, including the trade portfolio, the increase in the number of the Bank’s corporate clients, the trend of lending spreads, changes in activities engaged in by the Bank that are derived from the Bank’s client base, anticipated operating results and return on equity in future periods, including income derived from the Treasury Business Segment, and changes in the financial and performance strength of the Bank. 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 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. 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. Global risks are intensifying. Possible economic slowdowns in China, the United States and Europe add to the uncertainty of protectionism and trade tariffs. A more dovish outlook at the Federal Reserve for future rate increases and for reducing its balance sheet. Less pressure for the US dollar to strengthen in 2019. Recomposition of capital flows to emerging markets. Growth in Latin America is recovering, although more gradually than previously expected. Region will face a less favorable global environment: lower world growth and potential greater volatility on commodities prices. 3 Global Context
  4. 4. Profits Evolution 4 20.6 14.5 16.6 (40.7) 20.7 -$50 -$40 -$30 -$20 -$10 $0 $10 $20 $30 4Q17 1Q18 2Q18 3Q18 4Q18 (US$Million) Quarterly Profit (Loss) Annual Profit (Loss)138.3 (9.4) 0.0 (46.9) 82.0 127.6 (57.5) (10.0) (48.9) 11.1 Revenues Impairment loss on financial instruments Impairment loss on non financial assets Operating expenses Profit for the Period (US$Million) 2017 2018 4
  5. 5. Net Interest Income & Financial Margins 5 28.1 27.3 28.0 119.8 109.7 1.78% 1.74% 1.61% 1.85% 1.71% -3.00%-2.90%-2.80%-2.70%-2.60%-2.50%-2.40%-2.30%-2.20%-2.10%-2.00%-1.90%-1.80%-1.70%-1.60%-1.50%-1.40%-1.30%-1.20%-1.10%-1.00%-0.90%-0.80%-0.70%-0.60%-0.50%-0.40%-0.30%-0.20%-0.10%0.00%0.10%0.20%0.30%0.40%0.50%0.60%0.70%0.80%0.90%1.00%1.10%1.20%1.30%1.40%1.50%1.60%1.70%1.80%1.90%2.00%2.10%2.20%2.30%2.40%2.50%2.60%2.70% $0 $20 $40 $60 $80 $100 $120 $140 4Q17 3Q18 4Q18 2017 2018 Net Interest Income Net Interest Margin Net Interest Income & Margins (In US$ million, except percentages) 3Q18 Volume Rate NPL's 4Q18 NII & NIM - QoQ variation effects (In US$ million, except percentages) NII: $27.3MM (NIM: 1.74%) NII: $28MM (NIM: 1.61%) Total variation: +$0.7MM in NII or -13bps in NIM -$0.7MM +$0.1MM +$1.3MM 2017R Volume Rate NPL's 2018R NII & NIM - YoY variation effects (In US$ million, except percentages) NII: $119.8MM (NIM: 1.85%) NII: $109.7MM (NIM: 1.71%) Total variation: -$10.1MM in NII or -14bps in NIM +$1.3MM -$10.5MM -$0.9MM 3.48% 4.09% 4.21% 3.43% 3.97% 2.10% 2.89% 3.13% 1.95% 2.76% 1.38% 1.20% 1.08% 1.48% 1.21% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4Q17 3Q18 4Q18 2017 2018 Yield on Interest-Earning Assets Cost of Interest-Bearing Liabilities Net Interest Spread Net Interest Spread
  6. 6. Loan Origination and Maturities 6 5,459 5,524 5,724 2.26 1.93 1.97 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 4Q17 3Q18 4Q18 0.00 0.50 1.00 1.50 2.00 2.50 Loan Portfolio Average Evolution Average Balance Lending Credit Spread (%) * * Represents the spread over the Libor-based rate corresponding to the tenor of the transaction. 3,719 3,329 3,148 3,556 3,159 3,094 206 233 211 - 50 100 150 200 250 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 4Q17 3Q18 4Q18 Loan Origination and Maturities Loan origination ($MM) Loan maturities ($MM) Average Term (days)
  7. 7. Fees & Commission Income 7 378 352 335 335 371 9 162 157 17 98387 514 492 351 469 4Q17 3Q18 4Q18 2017 2018 Average loan commitments and financial guarantee contracts (In US$ million) Letters of Credit Credit commitments and guarantees
  8. 8. Commercial Portfolio Composition 8  Diversified country exposure 52% 10% 5% 5% 3% 3% 3% 3% 2% 2% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% Financial Institutions Oil and Gas (Integrated) Electric Power Food and Beverage Sugar Metal Manufacturing Other Services Retail Trade Grains and Oilseeds Airlines Plastics and Packaging Other Manufacturing Industries Coffee Sovereing Shipping Paper Oil and Gas (Upstream) Wholesalers Oil and Gas (Downstream) Construction and Infrastructure Commercial Portfolio by Industry 31-Dec-2017 31-Dec-2018 68% 65% 64% 13% 10% 10% 19% 25% 26% 31-Dec-2017 30-Sep-2018 31-Dec-2018 Commercial Portfolio by Term Short-term Medium & Long-term (current)* Medium & Long-term *Matures w ithin one year 19% 14% 11% 10% 8% 7% 6% 5% 5% 3% 3% 2% 1% 1% 1% 1% 1% 2% Brazil Mexico Colombia Argentina Panama Ecuador Costa Rica Guatemala Dominican Republic Chile Paraguay Trinidad & Tobago Honduras Peru El Salvador Singapore Germany Other < 1% Commercial Portfolio by Country31-Dec-2017 31-Dec-2018 59% 41% Short-term Commercial Portfolio by Trade Indicator (As of December 31, 2018) Trade Non-Trade 3,251 3,293 3,714 4,200 3,904 3,151 2,285 2,090 2015 2016 2017 2018 Commercial Portfolio by Client Type (EoP balances, in US$ million) FIs & Sovereigns Corporations
  9. 9. Commercial Portfolio Country Specific (As of December 31, 2018) 9 Brazil Argentina Mexico Costa Rica 67% 33% By Remaining Term Maturities up to 1 year Maturities greater than 1 year 69% 31% By Remaining Term Maturities up to 1 year Maturities greater than 1 year 37% 21% 42% 0% By Client Type Private FIs State-owned FIs Private Corporations State-owned corporations 14% 0% 61% 25% By Client Type Private FIs State-owned FIs Private Corporations State-owned corporations 63% 37% By Remaining Term Maturities up to 1 year Maturities greater than 1 year 84% 16% By Remaining Term Maturities up to 1 year Maturities greater than 1 year 20% 6% 37% 37% By Client Type Private FIs State-owned FIs Private Corporations State-owned corporations
  10. 10. Credit Quality NPL and Allowance for Credit Loses 10 Commercial Portfolio 5,999 5,731 6,054 6,305 6,290 Total Allowance for Credit Losses 88.1 90.1 87.4 142.5 104.1 Total Allowance for Credit Losses to Commercial Portfolio 1.47% 1.57% 1.44% 2.26% 1.65% Stage 1 Exposure 5,274 5,185 5,669 5,948 5,836 Total Allowance for Credit Losses 21 24 37 40 38 Allowance for Credit Losses / Stage 1 Exposure 0.40% 0.46% 0.65% 0.67% 0.65% Stage 2 Exposure 666 488 331 237 389 Total Allowance for Credit Losses 39 36 24 13 17 Allowance for Credit Losses / Stage 2 Exposure 5.85% 7.34% 7.34% 5.67% 4.26% Stage 3 Exposure 59 59 54 119 65 Total Allowance for Credit Losses 28 30 26 89 49 Allowance for Credit Losses / Stage 3 Exposure 47.64% 51.46% 48.32% 74.98% 76.41% Jun-18 STAGE 1 STAGE 2 STAGE 3 TOTAL (US$ million, except percentages) Dec-18Sep-18Dec-17 Mar-18
  11. 11. Operating Expenses & Efficiency 11 (US$ million, except percentages) 2018 2017 YoY (%) 4Q18 3Q18 4Q17 QoQ (%) YoY (%) Operating expenses Salaries and other employee expenses 28.0 27.7 1% 6.6 5.2 7.3 27% -10% Depreciation of equipment and leasehold improvements 1.3 1.6 -19% 0.3 0.3 0.4 3% -20% Amortization of intangible assets 1.2 0.8 40% 0.2 0.3 0.3 -51% -42% Other expenses 18.5 16.8 10% 5.3 5.0 5.1 6% 4% Total Operating Expenses $48.9 $46.9 4% $12.4 $10.9 $13.1 14% -6% Efficiency Ratio 38.3% 33.9% 13% 36.3% 36.0% 38.0% 1% -4% 34.5 30.1 34.1 138.3 127.6 (13.1) (10.9) (12.4) (46.9) (48.9) 38.0% 36.0% 36.3% 33.9% 38.3% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% -35 -15 5 25 45 65 85 105 4Q17 3Q18 4Q18 2017 2018 Efficiency (In US$ million, except percentages) Revenue Operating expenses Efficiency Ratio
  12. 12.  Return to profitability  Positive trend in top line revenues  Higher portfolio average balances  Normalization of credit provisioning  Proactive management of NPL portfolio 4Q18 4Q18 and Full Year 2018 Highlights Financial Performance Overview  Impacted by credit impairments  Non-recurring restructuring and optimization charges  Improved quality of commercial portfolio  Solid capitalization  Dividend per share maintained YoY FY18 12
  13. 13. Questions & Answers 13

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