Bladex announces 3Q24 Net Profit of $53.0 Million, or $1.44 per share; annualized return on equity of 16.4% in 3Q24
PANAMA CITY, Oct. 29, 2024 /PRNewswire/ -- Banco Latinoamericano de Comercio Exterior, S.A. (NYSE: BLX, "Bladex", or "the Bank"), a Panama-based multinational bank originally established by the central banks of 23 Latin-American and Caribbean countries to promote foreign trade and economic integration in the Region, announced today its results for the Third Quarter ("3Q24") and nine months ("9M24") ended September 30, 2024.
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").
3Q24 & 9M24 Financial & Business Highlights
- Strengthened Profitability, with Net Profit of $53.0 million in 3Q24 (+16% YoY) and $154.4 million in 9M24 (+29% YoY), fostered by higher total revenues (+8% YoY in 3Q24 and +20% YoY in 9M24).
- Annualized Return on Equity ("ROE") improved to 16.4% for both the 3Q24 (+46 bps YoY) and 9M24 (+206 bps YoY), on the back of strong recurrent operating results.
- Net Interest Income ("NII") increased to $66.6 million in 3Q24 (+10% YoY) and $192.3 million in 9M24 (+15% YoY), driven by 8 bp YoY increase in Net Interest Margin ("NIM") to 2.55% in 3Q24 and a 5 bps YoY increase to 2.49% in 9M24, resulting from higher lending volumes and spreads, new client on-boarding, cross selling efforts and efficient cost of funds management.
- Fee income reached $10.5 million for 3Q24 (-6% YoY), amounting $32.5 million for 9M24 (+45% YoY), mostly driven by the continued positive trend in letter of credits fees. The uneven transaction-based nature of the Bank's loan syndication desk activity remained up for 9M24 (+65% YoY) despite lesser activity for 3Q24 (-46% YoY).
- Efficiency Ratio stood at 27.1% for 3Q24, similarly to a year ago, and 25.6% for 9M24, a 1.5 p.p. YoY improvement on the back of higher total revenues, compensating the 13% YoY increase in 9M24 operating expenses.
- New all-time high Credit Portfolio at $10,875 million as of September 30, 2024 (+18% YoY).
- Commercial Portfolio EoP balances also reached a new record level of $9,673 million at the end of 3Q24 (+17% YoY), denoting a continued demand and business growth from new client onboarding and product cross-selling.
- Investment Portfolio, mostly consisting of investment-grade securities held at amortized cost, further enhancing country and credit-risk exposure diversification and providing contingent liquidity funding, increased to $1,202 million (+20% YoY).
- Healthy asset quality. Most of the credit portfolio (96%) continues to be low risk or Stage 1. At the end of 3Q24, impaired credits (Stage 3) reached $17 million or 0.2% of total Credit Portfolio, with a reserve coverage of 4.7x.
- Heightened deposit base, reaching a new record level of $5,639 million at the end of 3Q24 (+34% YoY), representing 59% of the Bank's total funding sources. The Bank also counts on ample and constant access to interbank and debt capital markets.
- Liquidity position at $1,708 million, or 15% of total assets as of September 30, 2024, mostly consisting of deposits placed with the Federal Reserve Bank of New York (75%).
- The Bank's Tier 1 Basel III Capital and Regulatory Capital Adequacy Ratios stood at 16.0% and 13.7%, respectively, well above the minimum requirements and within the Bank's risk appetite.
Financial Snapshot | ||||||
(US$ million, except percentages and per share amounts) | 3Q24 | 2Q24 | 3Q23 | 9M24 | 9M23 | |
Key Income Statement Highlights | ||||||
Net Interest Income ("NII") | $66.6 | $62.8 | $60.5 | $192.3 | $167.6 | |
Fees and commissions, net | $10.5 | $12.5 | $11.1 | $32.5 | $22.4 | |
Gain (loss) on financial instruments, net | $0.3 | ($0.4) | $0.0 | $0.1 | ($1.9) | |
Total revenues | $77.6 | $75.0 | $71.8 | $225.2 | $188.3 | |
Provision for credit losses | ($3.5) | ($6.7) | ($6.5) | ($13.3) | ($17.5) | |
Operating expenses | ($21.0) | ($18.2) | ($19.5) | ($57.6) | ($51.0) | |
Profit for the period | $53.0 | $50.1 | $45.8 | $154.4 | $119.8 | |
Profitability Ratios | ||||||
Earnings per Share ("EPS") (1) | $1.44 | $1.36 | $1.25 | $4.20 | $3.28 | |
Return on Average Equity ("ROE") (2) | 16.4 % | 16.2 % | 15.9 % | 16.4 % | 14.4 % | |
Return on Average Assets ("ROA") (3) | 1.9 % | 1.9 % | 1.8 % | 1.9 % | 1.7 % | |
Net Interest Margin ("NIM") (4) | 2.55 % | 2.43 % | 2.48 % | 2.49 % | 2.44 % | |
Net Interest Spread ("NIS") (5) | 1.78 % | 1.74 % | 1.83 % | 1.77 % | 1.81 % | |
Efficiency Ratio (6) | 27.1 % | 24.3 % | 27.2 % | 25.6 % | 27.1 % | |
Assets, Capital, Liquidity & Credit Quality | ||||||
Credit Portfolio (7) | $10,875 | $10,336 | $9,244 | $10,875 | $9,244 | |
Commercial Portfolio (8) | $9,673 | $9,201 | $8,244 | $9,673 | $8,244 | |
Investment Portfolio | $1,202 | $1,134 | $1,000 | $1,202 | $1,000 | |
Total Assets | $11,412 | $10,907 | $10,095 | $11,412 | $10,095 | |
Total Equity | $1,310 | $1,264 | $1,161 | $1,310 | $1,161 | |
Market Capitalization (9) | $1,195 | $1,091 | $775 | $1,195 | $775 | |
Tier 1 Capital to Risk-Weighted Assets (Basel III – IRB) (10) | 16.0 % | 16.2 % | 15.4 % | 16.0 % | 15.4 % | |
Capital Adequacy Ratio (Regulatory) (11) | 13.7 % | 14.0 % | 13.6 % | 13.7 % | 13.6 % | |
Total Assets / Total Equity (times) | 8.7 | 8.6 | 8.7 | 8.7 | 8.7 | |
Liquid Assets / Total Assets (12) | 15.0 % | 17.4 % | 15.3 % | 15.0 % | 15.3 % | |
Credit-impaired Loans to Loan Portfolio (13) | 0.2 % | 0.1 % | 0.1 % | 0.2 % | 0.1 % | |
Impaired Credits (14) to Credit Portfolio | 0.2 % | 0.1 % | 0.1 % | 0.2 % | 0.1 % | |
Total Allowance for Losses to Credit Portfolio (15) | 0.7 % | 0.7 % | 0.6 % | 0.7 % | 0.6 % | |
Total Allowance for Losses to Impaired credits (times) (15) | 4.7 | 7.5 | 5.6 | 4.7 | 5.6 | |
Recent Events
Quarterly dividend payment: The Board of Directors approved a quarterly common dividend of $0.50 per share corresponding to 3Q24. The cash dividend will be paid on November 26, 2024, to shareholders registered as of November 8, 2024.
Appointment of Director: On September 19, 2024, in compliance with applicable laws and regulations, and as provided for in the Articles of Incorporation, the Board of Directors of the Bank announced that its Class "A" shareholders elected Mr. Daniel Tillard as Director representing the holders of Class "A" shares of the Bank's common stock, effective on September 17, 2024. Mr. Tillard is currently the President of Banco de la Nación Argentina and his initial term as a Class "A" Director shall expire on the date of the Annual Meeting of Shareholders of the year 2026.
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
1. Earnings per Share ("EPS") calculation is based on the average number of shares outstanding during each period.
2. ROE refers to return on average stockholders' equity which is calculated based on unaudited daily average balances.
3. ROA refers to return on average assets which is calculated based on unaudited daily average balances.
4. NIM refers to net interest margin which constitutes to Net Interest Income ("NII") divided by the average balance of interest-earning assets.
5. 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.
6. Efficiency Ratio refers to consolidated operating expenses as a percentage of total revenues.
7. The Bank's "Credit Portfolio" includes gross loans at amortized cost and loans at FVOCI (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.
8. The Bank's "Commercial Portfolio" includes gross loans at amortized cost and loans at FVOCI (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.
9. Market capitalization corresponds to total outstanding common shares multiplied by market close price at the end of each corresponding period.
10. 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.
11. As defined by the Superintendency of Banks of Panama through Rules No. 01-2015, 03-2016 and 05-2023, 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.
12. Liquid assets consist of total cash and due from banks, excluding time deposits with original maturity over 90 days and other restricted deposits, as well as corporate debt securities rated A- or above. Liquidity ratio refers to liquid assets as a percentage of total assets.
13. Loan Portfolio refers to gross loans at amortized cost and gross loans at FVOCI, which excludes 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.
14. Impaired Credits refers to Non-Performing Loans or NPLs and non-performing securities at FVOCI and at amortized cost.
15. 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 Caribbean countries, began operations in 1979 to promote foreign trade and economic integration in the Region. The Bank, headquartered in Panama, also has offices in Argentina, Brazil, Colombia, Mexico, and the United States of America, and a Representative License in Peru, supporting the regional expansion and servicing its customer base, which includes financial institutions and corporations.
Bladex is listed on the NYSE in the United States of America (NYSE: BLX), since 1992, and its shareholders include: central banks and state-owned banks and entities representing 23 Latin American countries; commercial banks and financial institutions; and institutional and retail investors through its public listing.
Conference Call Information
There will be a conference call to discuss the Bank's quarterly results on Wednesday, October 30, 2024 at 11:00 a.m. New York City time (Eastern Time). For those interested in participating, please click here to pre-register to our conference call or visit our website at http://www.bladex.com. Participants should register five minutes before the call is set to begin. The webcast presentation will be available for viewing and downloads on http://www.bladex.com. The conference call will become available for review one hour after its conclusion.
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
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SOURCE Banco Latinoamericano de Comercio Exterior, S.A. (Bladex)
