PANAMA CITY, Feb. 22, 2024 /PRNewswire/ -- Banco Latinoamericano de Comercio Exterior, S.A. ("Bladex" or the "Bank"), announced today its Board of Directors' approval of a quarterly cash dividend of US$0.50 per share corresponding to the fourth quarter of 2023. The cash dividend is payable March 19, 2024 to the Bank's stockholders as of March 4, 2024 record date. As of December 31, 2023, Bladex had 36,539,860.73 shares outstanding of all classes. Bladex, a multinational bank originally established by the ce ...

Financial Performance - Total interest income for Q3 2023 reached $182,433,000, a 96.8% increase from $92,666,000 in Q3 2022[15] - Net interest income for the nine months ended September 30, 2023, was $167,618,000, up 69.9% from $98,578,000 in the same period of 2022[15] - Basic earnings per share for Q3 2023 were $1.25, compared to $0.74 in Q3 2022, reflecting a 68.9% increase[15] - Total revenues for the nine months ended September 30, 2023, amounted to $188,332,000, a 65.9% increase from $113,487,000 in the same period of 2022[15] - The profit for the three months ended September 30, 2023, was $45,753 thousand, compared to $26,874 thousand for the same period in 2022, representing a year-over-year increase of 70%[37] - The profit for the period for the nine months ended September 30, 2023, was $119,773 thousand, significantly higher than $61,015 thousand for the same period in 2022, marking an increase of 96%[38] - The total comprehensive income for the nine months ended September 30, 2023, was $114,617 thousand, up from $82,450 thousand in the same period of 2022, indicating a growth of 39%[37] Credit Quality and Risk - Provision for credit losses for Q3 2023 was $6,488,000, compared to $4,824,000 in Q3 2022, indicating an increase in credit risk[15] - The allowance for expected credit losses on loan commitments and financial guarantee contracts reflects management's estimate of expected credit losses, which is crucial for assessing credit risk[34] - The loss allowance for expected credit losses as of September 30, 2023, was $49,901 thousand, compared to $55,200 thousand as of December 31, 2022, indicating a decrease of approximately 9.4%[54] - Credit-impaired loans at the end of the period were $6,863 thousand, down from $21,561 thousand at the beginning of the period, reflecting a significant reduction[64] - The total allowance for expected credit losses as of September 30, 2023, included $32,760 thousand for Stage 1, $10,278 thousand for Stage 2, and $6,863 thousand for Stage 3[73] Asset and Liability Management - The bank's total assets as of September 30, 2023, were $1,340,329,000, reflecting a strong asset base[29] - The total equity as of September 30, 2023, was $1,160,977 thousand, an increase from $1,048,924 thousand at the end of September 2022, reflecting a growth of approximately 11%[38] - Total liabilities were $9,129,603,000, with deposits constituting $4,295,414,000[116] - The total amount of customers' liabilities under acceptances was $163,345 thousand, indicating stable customer engagement[48] - The bank's total liquid assets were $1,545 million as of September 30, 2023, compared to $1,269 million on December 31, 2022, showing an increase of 21.69%[101] Loan Portfolio - As of September 30, 2023, total loans at amortized cost amounted to $6,899,588 thousand, with $6,650,826 thousand classified as current and $10,107 thousand as past due[32] - The total loans at amortized cost as of September 30, 2023, reached $6,899,588 thousand, an increase from $6,763,020 thousand as of December 31, 2022, representing a growth of approximately 2.01%[68] - The total amount committed or guaranteed in loan and financial contracts reached $1,078,890 thousand as of September 30, 2023, compared to $779,374 thousand at the end of 2022, indicating a significant increase of 38.41%[86] - The amount of loans in Brazil as of September 30, 2023, was $955,732 thousand, a slight decrease from $980,205 thousand as of December 31, 2022, reflecting a decline of about 2.49%[68] - The total amount of loans in Colombia as of September 30, 2023, was $966,364 thousand, an increase from $702,409 thousand as of December 31, 2022, representing a growth of approximately 37.56%[68] Derivative Financial Instruments - The notional value of derivative financial instruments as of September 30, 2023, was $2,038,311 thousand, with fair value assets of $107,818 thousand and liabilities of $(71,025) thousand[32] - The total carrying amount of derivative financial instruments was $107,818,000 in assets and $71,025,000 in liabilities[116] - The nominal amount of derivative financial instruments as of September 30, 2023, was $2,038,311 thousand, with a carrying amount of assets at $107,818 thousand and liabilities at $71,025 thousand[190] - The total nominal amount of interest rate swaps as of September 30, 2023, is $562,638,000, while cross currency swaps total $272,214,000, leading to an overall total of $834,852,000[196] Interest Rate Sensitivity - The bank's exposure to interest rate changes indicated that a +50 bps change would affect profit by $2,412,000 and equity by -$6,682,000 as of September 30, 2023[113] - The total interest rate sensitivity was reported at $1,129,675 thousand, indicating the bank's exposure to interest rate fluctuations[145] Liquidity Management - The liquidity ratio at the end of the period was 161.22% as of September 30, 2023, down from 167.46% at the end of 2022[100] - Demand and "overnight" deposits increased to $883 million as of September 30, 2023, up from $583 million at the end of 2022, representing a growth of 51.55%[92] - The bank's unrestricted deposits with the Federal Reserve increased to $1,409,929 thousand from $1,144,896 thousand as of December 31, 2022[156]

Financial Data and Key Metrics Changes - The company reported a quarterly net income of approximately $46 million for Q3 2023, representing a 70% year-on-year increase and a 23% sequential increase [6][14]. - Net interest income reached a record $60.5 million, an 11% increase from the previous quarter and a 51% increase year-on-year, with a net interest margin of 2.48%, reflecting a 71 basis point improvement year-on-year [13][9]. - Total assets exceeded $10 billion, increasing by 8% year-on-year, driven by robust loan portfolio balances [60]. Business Line Data and Key Metrics Changes - Fee income increased by 77% year-on-year, reaching $11 million, with letters of credit fees rising to $6.2 million, up 76% from last year [19][4]. - The commercial portfolio, including loans and off-balance sheet letters of credit, reached a record $8.2 billion, up 5% from last year [60]. - The customer base increased by over 30% year-on-year, with corporate clients now representing 63% of the loan portfolio [5]. Market Data and Key Metrics Changes - The company’s funding sources remain diversified, with deposits representing 50% of total funding, reaching $4.2 billion, a 23% year-on-year increase [17][57]. - The net interest spread increased to 1.83%, driven by higher lending spreads and efficient cost of funds [18]. Company Strategy and Development Direction - The company is focused on profitable growth, with a strategic plan aimed at achieving sustainable mid-teen returns by 2026 [55]. - The management is actively pursuing new client onboarding and product cross-selling to drive business volumes, particularly in the letter of credit and vendor finance sectors [7][5]. - The company anticipates closing the year with an efficiency ratio of approximately 27%, better than the initial estimate of 32% [22]. Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the geopolitical situation, particularly the Israel-Hamas conflict, noting mixed implications for the Latin American region [44][52]. - The company revised its 2023 return on equity guidance from 11%-13% to a new range of 14%-15% by year-end, reflecting strong performance and profitability [22][39]. - Management highlighted the importance of maintaining a strong capital position and liquidity, with a focus on maximizing shareholder returns [50]. Other Important Information - The company’s asset quality remains strong, with non-performing loans (NPLs) below 0.1% [3][64]. - The board declared a dividend of $0.25 per share, unchanged from previous quarters, representing 20% of quarterly earnings [62]. Q&A Session Summary Question: What are the $2.2 million in other net fees in the quarter? Are they sustainable going forward? - The fees represent opportunistic pre-committed transactions, with an estimated run rate of around $1 million going forward [51]. Question: Any plans to modify your dividend policy, given the amazing results? - Discussions regarding capital management, including dividends and potential buybacks, are ongoing at the board level, focusing on maximizing total shareholder return [27]. Question: Could you give us some color about the guidance expectations for 2024? - The company is currently working on the 2024 budget and will provide guidance in the next call [28].

| --- | --- | |------------------------|-------| | | | | | | | 3Q23 Earnings Results | | | October 2023 | | Credit Book $9.2 Bn ↑ 1% QoQ |↑ 4% YoY Net Income $45.8M ↑ 23% QoQ |↑ 70% YoY Strong Fee Income and Efficiency Improvement while Investing in Transformation NIM 2.48% ↑ 6 bps QoQ | ↑ 71 bps YoY 2 3 (USD millions, except for %) Stable Loan Portfolio and Strong Growth on Deposits Higher Profits and RoE Expansion Fostered by increased Margins Increased NII and Margin Expansion ত Efficiency Ratio 27.2% ↓ ...

[Unaudited Condensed Consolidated Interim Financial Statements](index=2&type=section&id=Unaudited%20condensed%20consolidated%20interim%20financial%20statements) [Unaudited Condensed Consolidated Interim Statement of Financial Position](index=5&type=section&id=Unaudited%20condensed%20consolidated%20interim%20statement%20of%20financial%20position) The Bank's balance sheet expanded, with total assets reaching $10.13 billion, driven by growth in cash and deposits Statement of Financial Position Highlights (in thousands of US dollars) | Account | June 30, 2023 (Unaudited) | December 31, 2022 (Audit) | | :--- | :--- | :--- | | **Total Assets** | **10,133,692** | **9,283,910** | | Cash and due from banks | 1,820,024 | 1,241,586 | | Loans, net | 6,820,865 | 6,760,434 | | **Total Liabilities** | **9,006,170** | **8,214,563** | | Total deposits | 4,099,238 | 3,205,386 | | Borrowings and debt, net | 4,048,071 | 4,416,511 | | **Total Equity** | **1,127,522** | **1,069,347** | [Unaudited Condensed Consolidated Interim Statement of Profit or Loss](index=6&type=section&id=Unaudited%20condensed%20consolidated%20interim%20statement%20of%20profit%20or%20loss) Profitability surged as net interest income grew 83% to $107.1 million and net profit more than doubled to $74.0 million Profit or Loss Highlights (in thousands of US dollars, except per share data) | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Total interest income | 302,881 | 109,057 | | Total interest expense | (195,803) | (50,637) | | **Net interest income** | **107,078** | **58,420** | | Provision for credit losses | (11,022) | (8,944) | | **Profit for the period** | **74,020** | **34,141** | | **Basic earnings per share (in US dollars)** | **2.03** | **0.94** | [Unaudited Condensed Consolidated Interim Statement of Comprehensive Income](index=7&type=section&id=Unaudited%20condensed%20consolidated%20interim%20statement%20of%20comprehensive%20income) Total comprehensive income increased to $73.6 million, driven by higher net profit despite a small loss in OCI Comprehensive Income Summary (in thousands of US dollars) | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Profit for the period | 74,020 | 34,141 | | Other comprehensive income (loss) | (469) | 9,542 | | **Total comprehensive income for the period** | **73,551** | **43,683** | [Unaudited Condensed Consolidated Interim Statement of Changes in Equity](index=8&type=section&id=Unaudited%20condensed%20consolidated%20interim%20statement%20of%20changes%20in%20equity) Total equity grew to $1.13 billion, supported by $74.0 million in net profit, partially offset by dividends Reconciliation of Equity (in thousands of US dollars) | Description | Amount | | :--- | :--- | | Balances at January 1, 2023 | 1,069,347 | | Profit for the period | 74,020 | | Other comprehensive income (loss) | (469) | | Dividends declared | (18,220) | | Other changes (net) | 2,844 | | **Balances at June 30, 2023** | **1,127,522** | [Unaudited Condensed Consolidated Interim Statement of Cash Flows](index=9&type=section&id=Unaudited%20condensed%20consolidated%20interim%20statement%20of%20cash%20flows) Cash and cash equivalents increased by $566.6 million, led by a strong turnaround in operating cash flow Cash Flow Summary (in thousands of US dollars) | Cash Flow Category | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | 986,241 | (920,295) | | Net cash provided by (used in) investing activities | 3,013 | (289,867) | | Net cash (used in) provided by financing activities | (422,698) | 798,971 | | **Increase (decrease) net in cash and cash equivalents** | **566,556** | **(411,191)** | | Cash and cash equivalents at end of the period | 1,757,492 | 799,810 | [Notes to the Unaudited Condensed Consolidated Interim Financial Statements](index=10&type=section&id=Notes%20to%20the%20unaudited%20condensed%20consolidated%20interim%20financial%20statements) [Note 1. Corporate Information](index=10&type=section&id=1.%20Corporate%20information) Bladex is a specialized multinational bank based in Panama focused on financing foreign trade in Latin America - The Bank's primary mission is to support foreign trade and economic integration in Latin America and the Caribbean[39](index=39&type=chunk) - Bladex is headquartered in Panama City, Republic of Panama, and is regulated by the **Superintendence of Banks of Panama (SBP)**[39](index=39&type=chunk)[21](index=21&type=chunk) - The Bank has a significant international presence with an agency in New York City and representative offices in Argentina, Mexico, Colombia, and Peru[42](index=42&type=chunk)[43](index=43&type=chunk)[22](index=22&type=chunk) [Note 3. Financial Risk Review](index=11&type=section&id=3.%20Financial%20risk%20review) The Bank outlines its management of key financial risks, including credit, liquidity, and market risk exposures [A. Credit Risk](index=11&type=section&id=A.%20Credit%20risk) Credit exposure is managed through grading, with the gross loan portfolio at $6.80 billion and Stage 2 loans at $166.5 million Credit Quality of Loans at Amortized Cost (in thousands of US dollars) | Stage | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Stage 1 (12-month ECL) | 6,627,780 | 6,634,190 | | Stage 2 (Lifetime ECL) | 166,489 | 98,723 | | Stage 3 (Credit-impaired) | 10,107 | 30,107 | | **Gross Loans** | **6,804,376** | **6,763,020** | | **Loss Allowance** | **(42,668)** | **(55,200)** | Reconciliation of Loss Allowance for Loans (in thousands of US dollars) | Description | Amount | | :--- | :--- | | Allowance at Dec 31, 2022 | 55,200 | | Net effect of changes | 4,359 | | Derecognized instruments | (12,865) | | New instruments | 17,118 | | Write-offs | (21,144) | | **Allowance at June 30, 2023** | **42,668** | - The largest credit concentrations by industry are in Financial Institutions (**$2.84B**) and Manufacturing (**$1.62B**), with top country exposures in Brazil, Mexico, and Colombia[96](index=96&type=chunk)[97](index=97&type=chunk) [B. Liquidity Risk](index=25&type=section&id=B.%20Liquidity%20risk) The Bank maintains a strong liquidity position with a Liquidity Coverage Ratio of 136.24% and total liquid assets of $1.76 billion Key Liquidity Ratios | Ratio | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | LCR (at period end) | 136.24 % | 167.46 % | - The Bank's liquid assets increased to **$1.76 billion** from **$1.19 billion** at year-end 2022[156](index=156&type=chunk) - The maturity analysis of financial assets and liabilities shows a cumulative net positive position of **$1.63 billion**[142](index=142&type=chunk) [C. Market Risk](index=32&type=section&id=C.%20Market%20risk) Market risk is managed via derivatives, with a +50 bps rate shift impacting profit by +$3.1 million and equity by -$4.6 million Interest Rate Sensitivity Analysis (Effect of +/- 50 bps change) | Scenario | Effect on Profit or Loss (thousands) | Effect on Equity (thousands) | | :--- | :--- | :--- | | +50 bps | 3,148 | (4,573) | | -50 bps | (3,345) | 4,734 | - The Bank has a net asset-sensitive position with a total interest rate sensitivity gap of **$1.19 billion**[158](index=158&type=chunk) - The Bank's net foreign currency position is minimal at **$568 thousand**, indicating well-hedged foreign exchange risk[163](index=163&type=chunk) [Note 4. Fair Value of Financial Instruments](index=37&type=section&id=4.%20Fair%20value%20of%20financial%20instruments) Most financial instruments are valued using Level 2 inputs, with disclosed fair values close to carrying amounts - The vast majority of financial instruments measured at fair value are categorized under **Level 2** of the fair value hierarchy[182](index=182&type=chunk) Carrying Amount vs. Fair Value (in thousands of US dollars, as of June 30, 2023) | Item | Carrying Amount | Fair Value | | :--- | :--- | :--- | | Loans at amortized cost | 6,820,865 | 6,845,824 | | Securities at amortized cost | 1,009,857 | 973,210 | | Borrowings and debt, net | 4,048,071 | 4,034,583 | [Note 10. Derivative Financial Instruments](index=45&type=section&id=10.%20Derivative%20financial%20instruments) The Bank uses derivatives with a total notional amount of $1.54 billion to hedge interest rate and FX risks Notional Amount of Hedging Instruments (in thousands of US dollars) | Hedge Type | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Fair value hedges | 527,180 | 546,504 | | Cash flow hedges | 1,009,805 | 1,186,950 | | **Total Notional** | **1,536,985** | **1,733,454** | - The primary risks being hedged are **interest rate risk** and a combination of interest rate and foreign exchange risk[207](index=207&type=chunk) [Note 19. Business Segment Information](index=61&type=section&id=19.%20Business%20segment%20information) The Commercial segment is the primary profit driver, contributing $70.6 million of the Bank's total profit Segment Performance for Six Months Ended June 30, 2023 (in thousands of US dollars) | Segment | Total Income | Segment Profit | Segment Assets | | :--- | :--- | :--- | :--- | | Commercial | 105,009 | 70,624 | 7,148,031 | | Treasury | 11,546 | 3,396 | 2,972,345 | | **Total** | **116,555** | **74,020** | **10,120,376** | [Note 22. Applicable Laws and Regulations](index=64&type=section&id=22.%20Applicable%20laws%20and%20regulations) The Bank complies with all key regulatory requirements, including a Capital Adequacy Index of 13.63% Key Regulatory Ratios | Ratio | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Liquidity Coverage Ratio (LCR) | 136.24% | 167.46% | | Capital Adequacy Index | 13.63% | 13.21% | | Leverage Ratio | 9.72% | 9.74% | - The Bank maintains a dynamic provision of **$136 million**, appropriated from retained earnings, as required by SBP Rule No. 4-2013[300](index=300&type=chunk) [Note 23. Subsequent Events](index=67&type=section&id=23.%20Subsequent%20events) The Board of Directors approved a quarterly cash dividend for the second quarter of 2023 after the period end - A quarterly cash dividend of **$0.25 per share** was approved by the Board on July 20, 2023, payable on August 15, 2023[301](index=301&type=chunk)

Financial Data and Key Metrics Changes - The company reported a net income of $37.1 million for the second quarter, maintaining a return on equity (ROE) of 13.4%, consistent with previous quarters and aligned with 2023 guidance [3][60] - Total assets reached over $10 billion, marking a 14% annual increase, driven by higher loan and investment portfolio balances [4] - Net interest income (NII) for the quarter was $54 million, a 67% increase year-on-year, with a net interest margin of 2.42%, up 88 basis points from the previous year [44][41] Business Line Data and Key Metrics Changes - Fee income increased by 35% quarter-on-quarter and 38% year-to-date, primarily from letters of credit, which surpassed $1 billion for the first time [3] - The commercial portfolio reached a record $8.1 billion, up 7% year-on-year and 4% from the previous quarter [4] - The bank's lending business is supported by a diversified investment securities portfolio of over $8 billion, with 75% invested in investment-grade issuers [23] Market Data and Key Metrics Changes - Deposits exceeded $4 billion for the first time, representing a 30% growth year-to-date and accounting for 49% of total funding [38][61] - The bank's asset quality remains strong, with 98% of the total credit portfolio classified as low risk under IFRS9 [7] Company Strategy and Development Direction - The company is focused on optimizing its client country mix and onboarding new clients, which aligns with its strategic plan to enhance execution capabilities [21][45] - The strategic plan aims to capitalize on growth opportunities in Latin America, despite projected GDP growth slowing to 1.6% in 2023 [50] - The bank is committed to maintaining a sound capital position, with capital ratios targeted between 15% and 16% [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a challenging economic environment, citing potential growth from foreign direct investments and resilient remittance flows [50][27] - The company anticipates a modest currency weakening in late 2023 and 2024, supported by easing inflation and potential rate cuts [27] Other Important Information - The bank's cost-to-income ratio remained stable at around 27%, reflecting solid revenue growth and cost control [26] - The board declared a dividend of $0.25 per share, unchanged from previous quarters [24] Q&A Session Summary Question: What could drive potential pressure on NIM in the second half of the year? - Management indicated that the pressure on NIM could be influenced by the Fed's actions regarding interest rates, with a current estimate of a 12 basis point impact for every 100 basis points change in rates [32][68] Question: Can you provide details on the Stage 3 exposure written off in the quarter? - The company wrote off a $25 million exposure related to a non-bank financial institution, with no optimistic recovery prospects [56] Question: Will the company consider increasing dividends in the near to medium term? - Management stated that dividend decisions are made quarterly by the board, with ongoing discussions about capital management alternatives [15]

Key Results: Sustained Strong Financial Performance in 2Q23 Credit Book $9.1 Bn ↑ 5% QoQ |↑ 5% YoY | --- | --- | |------------------------------------|-------| | | | | | | | 2Q23 Earnings Results July 2023 | | | | | Increased NII and Margin Expansion NII $54.5M ↑3 % QoQ |↑ 67% YoY Efficiency Ratio 27.2% ↑ 38 bps QoQ| ↓ 815 bps YoY Net Income $37.1M 0% QoQ |↑ 61% YoY 2 Strong Fee Income and Strict Cost Control while Investing in Transformation Deposits $4.1 Bn ↑ 14% QoQ |↑ 31% YoY ত Net Fees $6.5M ↑ 35% QoQ ...

Financial Performance - Net interest income for the three months ended March 31, 2023, was $52,620, an increase of 104.5% compared to $25,721 for the same period in 2022[8] - Total revenues for the first quarter of 2023 were $59,175, up 95.8% from $30,252 in the first quarter of 2022[8] - Profit for the period for Q1 2023 was $36,954, representing a significant increase from $11,119 in Q1 2022[8] - Basic and diluted earnings per share for Q1 2023 were both $1.02, compared to $0.31 in Q1 2022[8] - Total comprehensive income for the period was $33.760 million in Q1 2023, compared to $21.416 million in Q1 2022, marking a 57.5% increase[129] - Total profit for the period increased to $36.954 million in Q1 2023, compared to $11.119 million in Q1 2022, representing a growth of 232.5%[129] Assets and Liabilities - Total assets as of March 31, 2023, were $9,248,641, a decrease of 0.38% from $9,283,910 as of December 31, 2022[5] - Total liabilities decreased to $8,153,108 as of March 31, 2023, from $8,214,563 as of December 31, 2022, a reduction of 0.74%[5] - Total equity increased to $1,095,533 as of March 31, 2023, from $1,069,347 as of December 31, 2022, an increase of 2.44%[5] - The bank's total liabilities increased to $8,391,935 thousand as of March 31, 2023, from $7,983,409 thousand at the end of 2022, reflecting a rise of approximately 5.1%[160] Loans and Credit - Interest income from loans for Q1 2023 was $122,596, a substantial increase from $40,208 in Q1 2022[8] - Total loans at amortized cost amounted to $6,707,820,000, with a loss allowance of $55,200,000[40] - The total current loans at amortized cost as of March 31, 2023, was $6,655,268 million, compared to $6,763,020 million as of December 31, 2022[74] - The loss allowance for Stage 1 loans was $29,298 million, while Stage 2 and Stage 3 loans had allowances of $4,108 million and $25,865 million, respectively[65] - Credit-impaired loans increased to $25,865 thousand as of March 31, 2023, up from $21,561 thousand at the end of December 2022[86] Deposits and Funding - The bank's demand deposits rose significantly to $503,341 as of March 31, 2023, from $233,757 as of December 31, 2022, an increase of 115.5%[5] - Total deposits rose to $3,568,739,000 as of March 31, 2023, compared to $3,190,716,000 as of December 31, 2022, marking an increase of 11.8%[137] - The aggregate amount of deposits in the New York Agency increased to $725,117,000 as of March 31, 2023, compared to $526,474,000 as of December 31, 2022, a growth of 37.7%[137] Cash Flow and Liquidity - Net cash provided by operating activities was $518,211,000 in Q1 2023, a turnaround from a cash used of $481,213,000 in Q1 2022[32] - The bank's cash and cash equivalents at the end of the period were $1,264,524,000, up from $610,412,000 in the previous year[32] - Total liquid assets reached $1.303 billion as of March 31, 2023, up from $1.269 billion as of December 31, 2022, indicating a 2.67% increase[124] - The liquidity ratio at the end of March 31, 2023, was 195.85%, compared to 167.46% at the end of December 31, 2022[96] Derivative Financial Instruments - The bank's derivative financial instruments had a total notional value of $1,733,454,000, with fair value assets of $68,159,000 and liabilities of $33,761,000[48] - The nominal amount of derivative instruments used in fair value hedges totaled $555,093,000 as of March 31, 2023, compared to $546,504,000 as of December 31, 2022[145] - The total nominal amount for cash flow hedges was $990,431,000 as of March 31, 2023, with a carrying hedging asset of $105,334,000[146] Credit Losses and Provisions - As of March 31, 2023, the allowance for expected credit losses totaled $3,461 million, a decrease from $3,628 million as of December 31, 2022[52] - The net effect of changes in the reserve for expected credit losses was a reduction of $428 million during the period[52] - The total expected credit losses for Stage 1 loans as of March 31, 2023, was $6,578,105 million[65] Market and Operational Insights - The bank's representative offices are located in Buenos Aires, Mexico City, and Bogota, with a representative license in Lima, Peru, indicating ongoing market expansion efforts[36] - The bank maintained compliance with all borrowing agreements and covenants as of March 31, 2023[140] - The bank's exposure to foreign exchange risk included significant amounts in various currencies, with total assets in other currencies at $341,654 thousand[191]

PART I [Item 3. Key Information](index=11&type=section&id=Item%203.%20Key%20Information) This section outlines the principal financial, operational, and regional risks affecting the Bank's business and financial condition [Risk Factors](index=11&type=section&id=D.%20Risk%20Factors) The Bank's performance is materially affected by business-specific risks like market volatility and operational threats, alongside regional economic and political instability - The Bank's business is significantly impacted by market and macroeconomic conditions, including geopolitical events, pandemics, inflation, and changes in monetary policy, which can destabilize global markets and affect financial results[96](index=96&type=chunk)[126](index=126&type=chunk)[129](index=129&type=chunk) - The Bank faces significant liquidity risk due to its highly concentrated deposit base, with **45% of total deposits from central banks** as of December 31, 2022[104](index=104&type=chunk)[133](index=133&type=chunk)[135](index=135&type=chunk) - The transition from LIBOR to Alternative Reference Rates (ARRs) like SOFR presents substantial risks, including potential market dislocation and operational complexities in transitioning contracts[114](index=114&type=chunk)[115](index=115&type=chunk)[148](index=148&type=chunk) - The Bank is exposed to significant compliance risks related to complex anti-money laundering (AML), anti-corruption, and sanctions laws, with failures potentially leading to severe penalties[47](index=47&type=chunk)[48](index=48&type=chunk)[3](index=3&type=chunk) - Credit activities are highly concentrated in the Latin America and Caribbean Region, with **50% of the Credit Portfolio in five countries** as of year-end 2022, increasing susceptibility to localized economic downturns[218](index=218&type=chunk)[220](index=220&type=chunk) [Item 4. Information on the Company](index=31&type=section&id=Item%204.%20Information%20on%20the%20Company) This section provides an overview of the Bank's history, business structure, strategic direction, and regulatory environment [History and Development of the Company](index=31&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Established in 1977, Bladex is a multinational bank headquartered in Panama City to promote foreign trade in Latin America and the Caribbean - Bladex was organized in 1977 and began operations in 1979 as a specialized multinational bank to promote foreign trade and economic integration in the Latin America and Caribbean Region[230](index=230&type=chunk)[261](index=261&type=chunk) - The Bank is headquartered in Panama, chosen for its role as a regional banking center, its U.S. dollar-based economy, and its tax-exempt status granted by a contract-law[261](index=261&type=chunk) - Bladex operates through its head office in Panama, an agency in New York, a subsidiary in Brazil, and representative offices in Argentina, Mexico, and Colombia[286](index=286&type=chunk) [Business Overview](index=32&type=section&id=B.%20Business%20Overview) The Bank operates through Commercial and Treasury segments, with a strategic focus on expanding its customer base and optimizing its credit portfolio - The Bank operates through two business segments: the Commercial Business Segment for core financial intermediation and the Treasury Business Segment for investment and asset/liability management[265](index=265&type=chunk)[233](index=233&type=chunk)[292](index=292&type=chunk) - The Bank's five-year strategic plan (2022-2026) focuses on strengthening the business model, expanding the customer base, and optimizing commercial effectiveness and credit origination[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk) - The Bank is subject to extensive regulation by the Superintendency of Banks in Panama and by U.S. authorities for its New York Agency, covering capital, liquidity, and AML/CFT compliance[434](index=434&type=chunk)[435](index=435&type=chunk)[488](index=488&type=chunk) Credit Portfolio Growth (in millions USD) | Portfolio | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | :--- | | **Credit Portfolio** | **$8,726** | **$7,365** | **$5,946** | | Commercial Portfolio | $7,706 | $6,540 | $5,551 | | Investment Portfolio | $1,020 | $825 | $395 | [Operating and Financial Review and Prospects](index=58&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) This section analyzes the Bank's financial performance, liquidity position, capital resources, and critical accounting estimates [Operating Results](index=60&type=section&id=A.%20Operating%20Results) The Bank's profit increased 47% in 2022, driven by a significant rise in net interest income from higher rates and loan growth - The **71% increase in net interest income** in 2022 was driven by both higher volumes ($13.5M impact) and higher interest rates ($47.8M impact)[555](index=555&type=chunk)[514](index=514&type=chunk) - **Provision for credit losses increased significantly to $19.5 million** in 2022, up from $2.3 million in 2021, due to Credit Portfolio growth and provisions on impaired instruments[761](index=761&type=chunk)[1240](index=1240&type=chunk) - **Operating expenses rose 38% to $55.1 million** in 2022, attributed to strategic initiatives, new hires, and a new performance-based variable compensation policy[1175](index=1175&type=chunk)[537](index=537&type=chunk) Profit for the Year and Key Metrics | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Profit for the year** | **$92.0 M** | **$62.7 M** | **$63.6 M** | | Basic earnings per share | $2.54 | $1.62 | $1.60 | | Net interest income | $148.0 M | $86.8 M | $92.4 M | | Return on average total equity | 8.95% | 6.10% | 6.19% | [Liquidity and Capital Resources](index=72&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The Bank maintains a strong liquidity and capital position, with diversified funding sources and capital ratios well above regulatory minimums - The Bank's funding is diversified between deposits (40.3%) and borrowings/debt (59.7%), with deposits from central and state-owned banks constituting 45% of total deposits[1341](index=1341&type=chunk)[1342](index=1342&type=chunk) - Off-balance sheet arrangements, primarily documentary and stand-by letters of credit, **increased to $656 million** as of December 31, 2022, from $482 million in the prior year[916](index=916&type=chunk)[917](index=917&type=chunk) Financial Position Summary (in millions USD) | Metric | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$9,284** | **$8,038** | | Loans, net | $6,760 | $5,713 | | **Total Liabilities** | **$8,215** | **$7,046** | | Deposits | $3,205 | $3,037 | | Borrowings and debt, net | $4,417 | $3,304 | | **Total Equity** | **$1,069** | **$992** | Capital Adequacy Ratios | Ratio | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Tier 1 Capital Ratio (Basel III) | 15.3% | 19.1% | | Regulatory Capital Adequacy Ratio | 13.2% | 15.6% | [Critical Accounting Estimates](index=94&type=section&id=E.%20Critical%20Accounting%20Estimates) The Bank's financial statements rely on material estimates, particularly for credit loss allowances, securities impairment, and fair value of financial instruments - Management identifies the determination of allowances for expected credit losses, impairment of securities, and the fair value of financial instruments as critical accounting estimates[695](index=695&type=chunk) - These estimates require significant judgment, especially in assessing future cash flows for impaired loans and assumptions used in fair value models[1044](index=1044&type=chunk)[1045](index=1045&type=chunk)[1046](index=1046&type=chunk) [Item 6. Directors, Executive Officers and Employees](index=94&type=section&id=Item%206.%20Directors%2C%20Executive%20Officers%20and%20Employees) This section details the composition of the Board and executive team, their compensation structure, and board committee functions - The Board of Directors consists of ten members, with a separation between the roles of Chairman and CEO to ensure independent oversight[972](index=972&type=chunk)[836](index=836&type=chunk) - Executive compensation is performance-based, combining variable cash bonuses with long-term equity awards to align with corporate objectives[772](index=772&type=chunk)[773](index=773&type=chunk) - Non-employee directors receive an annual cash retainer ($85,000 for directors, $135,000 for the Chairman) and an annual equity award of restricted shares[782](index=782&type=chunk)[784](index=784&type=chunk) - As of December 31, 2022, the Bank's workforce comprised **238 permanent employees**, an increase from 184 in 2021[907](index=907&type=chunk)[912](index=912&type=chunk) [Item 7. Major Shareholders and Related Party Transactions](index=109&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This section details the Bank's ownership structure and transactions conducted with shareholders and related parties in the ordinary course of business - As of December 31, 2022, **Brandes Investment Partners, L.P. was the largest shareholder of Class E stock**, holding 17.1% of the class and 13.1% of total common stock[915](index=915&type=chunk) - Major Class A shareholders include Banco de la Nación Argentina (16.5% of class) and Banco do Brasil (15.4% of class)[915](index=915&type=chunk) - The Bank conducts credit and deposit transactions with its Class A and B stockholders, with **12% of the Loan Portfolio placed with these related parties** as of December 31, 2022[923](index=923&type=chunk) [Item 8. Financial Information](index=112&type=section&id=Item%208.%20Financial%20Information) This section references the included financial statements and outlines the Bank's dividend policy and legal proceedings status - The Bank's policy is to declare and distribute quarterly cash dividends, with the total dividend declared for 2022 at **$1.00 per common share**, unchanged from 2021 and 2020[954](index=954&type=chunk) - No legal or arbitration proceedings that could have a significant effect on the Bank's financial position or profitability are pending or contemplated[926](index=926&type=chunk) [Item 10. Additional Information](index=115&type=section&id=Item%2010.%20Additional%20Information) This section provides details on the Bank's corporate structure, share classes, and tax implications for shareholders - The Bank's common stock is divided into four classes (A, B, E, F) with different rights, and the affirmative vote of **75% of Class A shares is required for major corporate actions**[919](index=919&type=chunk)[974](index=974&type=chunk) - Under a special contract law, the Bank is **exempt from income tax in Panama**, and dividends paid are exempt from Panamanian dividend tax or withholding[1029](index=1029&type=chunk)[1049](index=1049&type=chunk) - For U.S. Holders, distributions are generally taxable as ordinary dividend income, and the Bank does not believe it will be classified as a Passive Foreign Investment Company (PFIC)[1011](index=1011&type=chunk)[1018](index=1018&type=chunk) [Item 11. Quantitative and Qualitative Disclosure About Market Risk](index=121&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The Bank actively manages market risk, which primarily consists of interest rate, foreign exchange, and price risk - The Bank's primary market risk is interest rate risk, which is managed by monitoring repricing mismatches and is considered relatively low due to the short-term nature of its portfolio[1055](index=1055&type=chunk)[1416](index=1416&type=chunk) - Foreign exchange risk is not significant as the majority of assets and liabilities are denominated in U.S. dollars, with most non-USD exposures hedged with derivatives[1067](index=1067&type=chunk)[1232](index=1232&type=chunk) - Price risk is associated with the Bank's Investment Portfolio, which had a carrying amount of **$1.02 billion** and a fair value of $0.97 billion as of December 31, 2022[1068](index=1068&type=chunk)[1069](index=1069&type=chunk) PART II [Item 15. Controls and Procedures](index=127&type=section&id=Item%2015.%20Controls%20and%20Procedures) This section affirms the effectiveness of the Bank's disclosure controls, procedures, and internal control over financial reporting - The CEO and CFO concluded that the Bank's disclosure controls and procedures were **effective** as of December 31, 2022[1074](index=1074&type=chunk) - Based on the COSO framework (2013), management concluded that the Bank's internal control over financial reporting was **effective** as of December 31, 2022[1076](index=1076&type=chunk)[1079](index=1079&type=chunk) - The independent registered public accounting firm, KPMG, issued an **unqualified opinion** on the effectiveness of the Bank's internal control over financial reporting[1106](index=1106&type=chunk)[801](index=801&type=chunk) [Item 16. Corporate Governance](index=129&type=section&id=Item%2016.%20Corporate%20Governance) This section covers corporate governance matters, including the audit committee financial expert, Code of Ethics, and accountant fees - The Board has determined that Mr. Fausto de Andrade Ribeiro is an "audit committee financial expert" and is independent[1112](index=1112&type=chunk) - The Bank has adopted a Code of Ethics that applies to its principal executive, financial, and accounting officers[1113](index=1113&type=chunk)[1114](index=1114&type=chunk) - The Bank's corporate governance practices differ from NYSE standards for domestic companies regarding the absence of a separate corporate governance committee and the process for approving equity compensation plans[1122](index=1122&type=chunk)[1123](index=1123&type=chunk) Principal Accountant Fees (in USD) | Fee Type | 2022 | 2021 | | :--- | :--- | :--- | | Audit fees | $677,892 | $656,124 | | Audit-related fees | $181,900 | $103,790 | | **Total** | **$859,792** | **$759,914** | PART III [Item 18. Financial Statements](index=132&type=section&id=Item%2018.%20Financial%20Statements) This section contains the Bank's audited consolidated financial statements for the three-year period ended December 31, 2022, prepared in accordance with IFRS - The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB[727](index=727&type=chunk)[1254](index=1254&type=chunk) - The independent auditor, KPMG, issued an **unqualified opinion**, stating that the financial statements present fairly the financial position and results of operations of the Bank[727](index=727&type=chunk) Consolidated Statement of Financial Position (in thousands USD) | | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$9,283,910** | **$8,038,111** | | Loans, net | $6,760,434 | $5,713,022 | | Securities, net | $1,023,632 | $831,913 | | **Total Liabilities** | **$8,214,563** | **$7,046,321** | | Deposits | $3,190,716 | $3,036,228 | | Borrowings and debt, net | $4,416,511 | $3,304,178 | | **Total Equity** | **$1,069,347** | **$991,790** | Consolidated Statement of Profit or Loss (in thousands USD) | | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net interest income | $148,011 | $86,782 | $92,450 | | Total revenues | $166,672 | $104,206 | $99,157 | | (Provision for) credit losses | ($19,521) | ($2,328) | $1,464 | | **Profit for the year** | **$92,040** | **$62,697** | **$63,593** |

Carlos Raad - Investor Relations Jorge Salas - Chief Executive Officer Ana Mendez - Executive Vice President and Chief Financial Officer Eduardo Vivone - Executive Vice President of Treasury and Capital Markets Samuel Canineu - Executive Vice President of Commercial Banking Operator Carlos Raad With this, let me turn the call to Jorge. Please go ahead. Moving on to Slide 2. So this slide provides a summary of our results for the quarter. As anticipated in our last quarter results call, our focus for 2023 is ...