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2Q17 Earnings Results Presentation
July 21, 2017
“This presentation contains forward-looking statements. These statements are made under the “safe harbor” provisions established
by the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties.
The forward-looking statements in this presentation reflect the expectations of the Bank’s management and are based on currently
available data; however, actual experience with respect to these factors is subject to future events and uncertainties, which could
materially impact the Bank’s expectations. A number of factors could cause actual performance and results to differ materially from
those contained in any forward-looking statement, including but not limited to the following: the anticipated growth of the Bank’s
credit portfolio, including its trade finance portfolio; the continuation of the Bank’s preferred creditor status; the impact of increasing
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 credit losses; the
need for additional provisions for credit losses; the Bank’s ability to achieve future growth, the Bank’s ability 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 large deposit withdrawals.”
2
Tier I Basel III ratio at 20.3% on declining RWA (-6% QoQ, and -21% YoY)
8.1% ROAE as of 6M17
Financial Performance Overview 2Q17 Highlights
x More balanced
Commercial Portfolio
Improving asset quality
and higher reserve
coverage
Lower NII & NIM on lower
average loan balances
Improved fee based
Income
Higher deposit balances
but higher overall CoF
Strong capitalization
levels but lower ROAE
Mexico displaces Brazil as # 1 country of exposure
Continued de-risking with lower country, industry and client concentrations
Increased exposure to trade assets (69%, +2 pts QoQ), and ST maturities (80%, +3 pts)
NPLs down 4% QoQ to $62.6MM
Higher provisions for ECL resulting in higher reserve coverage (2.06% 2Q17 from 1.89%
1Q17)
Successful Panama workout
Remaining NPL largely in Brazil (88.4% of total NPL)
Adjustment of amortization cost associated with the hedging of foreign currency deposits
Decreased loan portfolio balances on weaker market dynamics and ample liquidity
Net lending spreads impacted by portfolio mix shift towards trade and ST exposures,
partially offset by declining interest bearing liabilities
Continued rise in market rates underpins NIM resilience
+42% QoQ, with two closed syndication transactions
+11% YoY (YTD basis) on stronger L/C business
Deposits at new record-highs account for 63% of overall funding base
Overall cost of funds up +23 bps QoQ
3
One-time increase in
operating expenses Quarterly efficiency ratio at 37% on non-recurring severance expense
Quarterly profit impacted by lower portfolio balances,
and non-recurring effects ( amortization cost &
severance payments)
Quarterly fee income up on loan syndication activity
Higher quarterly provisions on ECL
Profit Evolution
6M17 results no longer affected by investment in
funds
Lower performance-based variable compensation
accrual in 2Q16
YoY lower provisions for ECL
4
Capitalization, Efficiency and ROAE
5
Fees & Other Income
Successful syndication transactions executed
Bladex ranked 16th in Bookrunner by Volume
League Table*
Robust syndications pipeline
Fees & Other income increased +11% 6M YoY
and +42% QoQ (2Q17/1Q17)
LCs business improved YoY with broader
client mix, QoQ and YoY higher number of L/C
confirmations and issuances
6
(*) Source: Bloomberg
NII declined QoQ on lower average loan
balances
Average rate effect affected by lower net
lending spreads and amortization cost
adjustment
Net Interest Income & Financial Margins
(*) -$2.6MM corresponding to the effect of derivative financial instruments used for hedging
7
*
Deposits at $3.4 billion, +5% QoQ and YoY, representing
63% of funding; Class A shareholders hold 71% of total
deposits
Overall increase of 23 bps in average funding costs;
Market rates increase (+16 bps)
Amortization cost impact (+19 bps)
Tighter spreads through liability management (-12 bps)
Funding Sources and Cost of Funds
Deposits by Type of Client
(As of June 30, 2017)
Funding Sources by Geography
(As of June 30, 2017)
Funding Sources
8
Mexico #1 country exposure (18%
+ 2pts QoQ), displacing Brazil
Peru and Chile exposure also
increased QoQ, other markets
experiencing lower demand
FI share of portfolio higher on
flight to quality, particularly in
Brazil
Lower corporate lending due to
de-risking and lower USD credit
demand
Commercial Portfolio Highlights
9
Dynamic industry exposure management
focused on sectors with favorable terms-of-trade
Oil & Gas exposure emphasizes integrated
companies; Upstream exposures remain at
multi-year lows
Commercial Portfolio remains very liquid with
80% maturing within one year (+3 pts QoQ,
+6 pts YoY)
Regional Exposure by Industry as of June 30, 2017
Commercial Portfolio Exposure by Industry
10
Slower multi-year de-risking trend
Current conditions not yet suitable for sustained
growth
Commercial Portfolio – Brazil Exposure Update (As of June 30, 2017)
11
NPL balances improved to $62.6MM (1.12% of total loans) from the
net effects of resolved Panama restructuring and deterioration of a
minor Brazil exposure
NPL and provisions for ECL now nearly entirely confined to Brazil,
representing 88% of all NPL exposures
Slow-paced ongoing restructuring negotiations continue to drive
provisions
Credit Quality - NPL
12
IFRS Rule 9 - Stage 1: Collectively assessed performing exposures based on 12-month ECL; IFRS Rule 9
- Stage 2: Performing exposures assessed based on lifetime ECL; IFRS Rule 9 - Stage 3: Credit-impaired
financial assets (“NPL”) based on lifetime ECL
Total allowance for ECL on loans
increased +$5.7MM to $115.6MM:
- (+) Higher requirement for NPL
(Stage 3) reflecting slow pace
of ongoing restructurings
- (+) Higher requirement for
performing loans on lifetime
expected losses (Stage 2)
- (-) Lower requirement for
performing loans on 12-month
expected losses (Stage 1), from
decreased loan balances
Credit Quality - Allowances
13
Book value growth
underpins share price
Attractive 12-month
forward valuations as of
June 30, 2017:
10.0x P/E
1.0x P/BV
$0.385/share declared for
2Q17
Robust annualized
dividend yield at 5.5%
Shareholder Returns
14
Thank You
15
Appendix
16
Key Financial Metrics
17
Quarterly Results Year to Date Results
(In US$ million, except percentages) 2Q17 1Q17 2Q16 QoQ YoY 6M17 6M16 YoY
Profit for the period $17.5 $23.5 $22.3 -25% -22% $40.9 $45.7 -10%
EPS (US$) $0.44 $0.60 $0.57 -26% -22% $1.04 $1.17 -11%
Return on Average Equity ("ROAE") 6.9% 9.4% 9.1% -27% -24% 8.1% 9.4% -13%
Return on Average Assets (ROAA) 1.08% 1.39% 1.20% -22% -10% 1.23% 1.21% 2%
Net Interest Margin ("NIM") 1.80% 2.02% 2.06% -11% -13% 1.91% 2.06% -7%
Net Interest Spread ("NIS") 1.44% 1.71% 1.83% -16% -21% 1.58% 1.84% -14%
Loan Portfolio 5,570 5,739 6,520 -3% -15% 5,570 6,520 -15%
Commercial Portfolio 5,840 6,141 6,767 -5% -14% 5,840 6,767 -14%
Total Allowance for ECL on loans, loan commitments and financial guarantee contracts
to Commercial Portfolio 2.06% 1.89% 1.60% 9% 29% 2.06% 1.60% 29%
Non-Performing Loans to Gross Loan Portfolio (%) 1.12% 1.14% 1.30% -1% -13% 1.12% 1.30% -13%
Total Allowance for ECL on loans, loan commitments and financial guarantee contracts
to Non-Performing Loans (x times) 1.9 1.8 1.3 8% 50% 1.9 1.3 50%
Efficiency Ratio 37% 29% 23% 25% 61% 33% 28% 19%
Market Capitalization 1,078 1,088 1,036 -1% 4% 1,078 1,036 4%
Assets 6,422 7,067 7,634 -9% -16% 6,422 7,634 -16%
Tier 1 Capital Ratio Basel III 20.3% 19.0% 15.6% 7% 30% 20.3% 15.6% 30%
Leverage (times) 6.3 6.9 7.7 -10% -18% 6.3 7.7 -18%(*) End-of-period balances.
Results
Performance
Portfolio Quality (*)
Efficiency
Scale &
Capitalization (*)
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