The Latin American Trade Finance Bank

Transcription

1 The Latin American Trade Finance Bank Bladex Corporate Presentation As of September 30, 2015

2 Disclaimer 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 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 improving 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 volatility of the Bank s Treasury trading revenues; the Bank s ability to achieve future growth and increase its number of clients, 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; existing and future governmental banking and tax regulations; the possibility of fraud; and the adequacy of the Bank s sources of liquidity to replace large deposit withdrawals. 2

3 A Leading Franchise with a Solid Track Record The Latin America Trade Finance Bank Bladex is the Latin American Trade Finance Bank, providing integrated financial solutions across Latin America s foreign trade value chain First Latin American bank to be listed on the NYSE and to be rated Investment Grade (both in 1992) Currently rated Baa2 / BBB / BBB+, all with Stable outlook Class A shareholders (Central Banks or designees from 23 Latin America ( LatAm ) countries) provide substantial support and represent a direct link between the Bank and the governments of Latin America Multi-national DNA embedded in its ownership structure, management and culture Remarkable Trajectory: + 35 years of Success Key Financial Highlights Current Credit Ratings FY2014 YoY (%) Net Income (mm): $ % Net Interest Income (mm): $ % Return on Average Equity: 12% 10% (2) Gross Loans (mm): $6,686 +9% Total Assets (mm): $8,025 +7% Total Deposits (mm): $2,507 +6% Market Capitalization (mm): $1,167 (1) +8% Asset Quality (non-accruing loans to commercial portfolio): (1) As of December 31, 2014; (2) As of December 31, % 0.05% (2) 1979 Following incorporation in 1978, Bladex initiated its operations in 1979 and issued its first bond in the international capital markets Moody s Fitch S&P 1988 Bladex is granted a license to operate as an agency by the New York State Banking Authorities Date of Rating Dec Jul May Bladex is the First Latin American bank registered with the SEC for its IPO, establishing a full listing on the NYSE Bladex conducts a Common Stock Rights Offering, with stand-by 2003 commitments issued by a group of Class A shareholders and multilateral organizations Bladex launches its client diversification strategy into trade-oriented 2005 corporations; expansion of its suite of products and services Date of Confirmation Nov Jul Jul Short-Term P-2 F2 A-2 Long-Term Baa2 BBB+ BBB Perspective Stable Stable Stable Bladex initiates funding diversification strategy: increase in central bank deposits, local & international debt sales, syndicated loan facilities Bladex cooperates with the International Finance Corporation to establish the first critical commodities finance facility in Latin America 3

4 Strong and Unique Shareholder Structure Shareholder Composition Board of Directors Composition Class A Central Banks or designees from 23 LatAm countries Class B LatAm & international banks and financial institutions Class E Public Float (NYSE listed) Out of 10 directors, 9 are independent and one represents the Bank s management (CEO) A unique shareholding structure Class A shareholders provide substantial support to Bladex, representing a direct link between the Bank and the governments of Latin America most of which have granted preferred creditor status to the Bank and also constituting the main source of deposits, a very reliable funding source Class A shareholders enjoy super-majority rights related to changes in the Bank s Articles of Incorporation Class A shareholders can only sell shares to other class A shareholders, thus maintaining the essence of the existing shareholder structure and ensuring support from central banks 4

5 Defined Value Proposition with Strong Business Fundamentals Business Value Proposition Strong Underlying Business Fundamentals Pan Regional Reach Product & Market Expertise In-depth knowledge of Latin America s local markets Backed by 23 Latin American governments Vast correspondent banking network throughout LatAm & other regions of the world Uniquely qualified staff with strong product expertise in Trade Value Chain, Cross-border Finance, Supply-side & Distribution, both intra-regional and inter-regional Global provider of natural resources with positive demographics Sustained growth and sound economic policies Driver of progress, economic growth and development Supporting specialization in both primary and manufacturing sectors Agility & Efficiency Client Focused Efficient organizational structure LEAN workflows Business Products & Services LEAN, client focused culture with a single point of contact Providing client-specific solutions Focused on long-term relationships Enhancing LatAm s role in global and regional value chains Growth of Multi-latinas as drivers of business expansion Multi-Pronged Business Segmentation Supporting business integration boosted by free trade agreements Trade Financing Pre-export and export finance Import financing Term loans and revolving credit facilities Letters of credit and guarantees Banker's acceptances Trade Structured Trade Solutions Pre-export financing with contract assignment and other guarantees Vendor finance (factoring, reverse factoring and forfaiting) Financing guaranteed by ECAs and/or private insurance programs Syndications Medium- and long-term loans Acquisition finance Trade-related term loans Trade & nontrade revolving credit facilities Liability management Bridge loans Financial Loans Leasing Term loans Guarantees A/B financing with multilaterals Working capital loans Non-Trade Central America and the Caribbean Southern Cone Andean Region Mexico Brazil REGIONS CLIENT BASE INDUSTRY SECTORS COUNTRIES Focus on Strategic Sectors for the Region O&G, Agribusiness, Food processing, Manufacturing Financial Institutions Among top 10 in all countries Corporate banking activity Corporations Foreign exchange generation capacity Growth oriented beyond domestic market Among top 10 in respective industry sector Corporate governance 5

6 Business Model targets sustainable, superior returns Leverage Proven Origination Capacity LatAm GDP Growth LatAm Trade Flow Growth On-book Portfolio ~ 10% Growth ~ 2% NIM < 1.4% Cost of Credit > 13.5% Tier 1 BIII ~ 1.5% ROAA < 30% Efficiency Target Consistent Core Performance 12%+ 12%+ ROAE ROAE Bladex Origination Active Portfolio Management 15%+ ROAE Asset Distribution & Services Bladex Client Base Growth Distribution Fee Based Services Valued Products & Services Financial Institutions Partners Structuring Trade Services 3%+ ROAE 3%+ ROAE Investors Other Tap Additional Income Sources 6

7 Strategy Hones Strengths & Positions to Seize Growth Opportunities Build New Businesses Develop Emerging Businesses Strengthen Core Business Improve Operating Efficiency through LEAN Processes, Structure & Organization Active credit portfolio management Achieve sustainable & consistent return on equity Improve quality of earnings Achieve greater risk dispersion + Develop robust syndication platform Expand diversified market distribution capabilities Risk sharing programs Secondary market transactions Securitization Platform Expand vendor finance and leasing capabilities Local vehicles (e.g. SOFOM in Mexico) + Explore adjacent markets & establish pipeline of new business activities in trade and regional integration, such as: Credit Insurance Capital Market transactions Structured Trade Finance Trade-related Services Factoring Trade Infrastructure Project Finance Expand Contingency Business Develop Guarantee and L/C Issuance Platform Ensure Long Term Viability Contribute towards sustainable 15% ROAE Ensure sustainable 12% Core ROAE 7

8 Adhering to World-Class Standards Board of Directors* Risk Policy and Assessment Committee Finance & Business Committee Nomination and Compensation Committee Audit and Compliance Committee CEO Internal Audit Risk Management Division SECOND LINE OF DEFENSE Monitoring Risk function Commercial Division Commercial Division FIRST LINE OF DEFENSE Operating Management Front end & enabling functions Finance Division Corporate Services THIRD LINE OF DEFENSE Assurance Audit function Very high corporate governance standards Multiple regulators: FED, SEC, NYSDFS, Superintendency of Banks of Panama, and other entities throughout the Region. Enterprise risk management & externally certified internal audit function Internal alignment of corporate culture, measurement system and process management to optimize total shareholder return (*) Except for the Bank s Chief Executive Officer (CEO), all other members of the Board of Directors are independent. 8

9 Mitigating Risk Reducing Risk within Improved Risk Profile in the Region Improved risk perception of the LatAm Region over the past 20 years Currently, 74% of the Credit Portfolio is in investment-grade countries, compared to 21% and 14% in 2003 and 1993, respectively Contributing to the Growth and Prosperity of Latin America Accumulated credit disbursements of $228 billion, with write-offs representing only 0.12% of total credit disbursements Disbursement volumes surpass or rival those of much larger institutions, both in the private sector and multilaterals 9

10 through a Sustainable Portfolio Strategy Focused on Diversification Sustained Portfolio Growth As of September 30, 2015 Commercial Portfolio Composition As of September 30, 2015 Commercial Portfolio By Country As of September 30, 2015 Commercial Portfolio By Industry Reduced exposure to Brazil by 15 percentage points since 2005 to September 30,

11 and Focus on Asset Quality Non-Performing Loans Evolution Proven track record of strong asset quality, with significant risk mitigants: Low-risk asset class, with short-dated exposures, and superior loss performance US dollar based lending, no meaningful net FX exposures Floating-rate lending & funding model minimizes interest rate risk exposure Conservative loss reserve methodology Pro-active loss prevention, and rigorous Non-Accruing Loans monitoring process Diligent recovery processes 11

12 Diversified Regional and Global Funding Sources. Funding Highlights Proven capacity to secure funding and maintain high liquidity levels, even during crises Deposits from central banks shareholders or designees provide a resilient funding base. They represent 68% of the Bank s total deposits as of September 30, 2015 Focus on increased diversification of global and regional funding sources on numerous relevant dimensions: client base, geography and currency Broad access to funding through public and private debt issuance programs in USD and other currencies Increased focus in medium and long-term funding to match a growing asset base with similar characteristics (US$ million) Funding Sources and Cost of Funds Deposits by Type of Client Diversified Funding Sources Funding by Currency (*) As of September 30, 2015 As of September 30, 2015 As of September 30, 2015 (*) Original Currency: all non-usd denominated liabilities are hedged into US Dollars with the exception of most MXN issuances which fund assets in the same currency. 12

13 with Conservative Liquidity Management Liquidity Management Highlights Liquidity Placements As of September 30, 2015 Advanced liquidity management operating under Basel III framework, monitoring liquidity through Liquidity Coverage Ratio ( LCR ) and Net Stable Funding Ratio ( NSFR ) 28% Liquidity Ratio (Liquid Assets / Total Deposits) 1.18x NSFR 1.03x LCR (Basel III) Liquid balances mainly held in cash-equivalent deposits in A-1 / P-1 rated financial institutions or A-rated negotiable money market instruments, amounted to $871 million as of September 30, 2015 High-quality, short-term trade finance book, which serves as an alternate source of liquidity, with approximately $1 billion in loans maturing on a monthly basis Liquidity Ratio Liquidity Coverage Ratio (US$ million) 13

14 Expanding Earnings Capacity & Profitability... Net Income Net Interest Income & Margin (US$ million) (US$ million, except percentages) (US$ million) Fees and Other Income (US$ million, except percentages) Efficiency Ratio 14

15 Supported by Strong Balance Sheet Total Assets Loan Portfolio (US$ million) (US$ million) Deposits Stockholder s Equity (US$ million) (US$ million) 15

16 and Solid Performance Return on Average Equity ROAE Return on Average Assets ROAA Tier 1 Capital Ratio Risk Weighted Assets ($ million) Basel I Basel III 2011 $4,090 n.a $4,609 n.a $5,473 n.a $6,027 $5, Sep-15 $5,848 $6,453 n.a. means not available 16 16

17 Key Financial Metrics (In US$ million, except w hen indicated otherw ise) M15 Results Business Net Income $66.3 $83.5 $89.4 $103.5 $78.0 Non-Core Income (4.6) Net Income attributable to Bladex stockholders EPS (US$) $2.25 $2.46 $2.21 $2.76 $2.12 Performance Return on Average Equity (ROAE) 11.4% 11.6% 10.0% 12.0% 11.7% Business ROAE 9.1% 10.4% 10.6% 11.6% 11.1% Return on Average Assets (ROAA) 1.5% 1.5% 1.2% 1.4% 1.4% Business ROAA 1.2% 1.4% 1.3% 1.4% 1.3% Net Interest Margin (NIM) 1.81% 1.70% 1.75% 1.87% 1.82% Net Interest Spread (NIS) 1.62% 1.44% 1.55% 1.71% 1.66% Loan Portfolio 4,960 5,716 6,148 6,686 6,759 Commercial Portfolio 5,354 5,953 6,630 7,187 7,124 Portfolio Quality (*) Allowance for Credit Losses to Commercial Portfolio 1.82% 1.31% 1.18% 1.20% 1.32% Allowance for Credit Losses to Non-Accruing Loan Balances (x times) Efficiency Efficiency Ratio 36% 42% 41% 32% 30% Business Efficiency Ratio 39% 43% 37% 32% 31% Scale & Capitalization (*) (*) End-of-period balances. Market Capitalization ,081 1, Assets 6,360 6,756 7,471 8,025 7,993 Tier 1 Capital Ratio Basel I 18.6% 17.9% 15.9% 15.3% 16.7% Leverage (times)

18 Bladex Value Proposition to Shareholders Bladex offers investors access to an entire continent with compelling longterm growth prospects Business model provides diversified exposure to emerging markets, but with well mitigated Credit Quality, Market, & Operational risks Committed to total shareholder return ( TSR ) Attractive dividend yield (annual dividend yield over 5.0%) as a function of core business growth (target 40% - 50% payout ratio) Attractive valuation multiples 18

19 Investment Highlights Leading Franchise in LatAm with Solid Track Record and a Tailored Business Model Experienced Management and Conservative Risk Management Practices Seasoned Senior Management with more than 45 years in C Suite roles World Class Standards in Corporate Governance, focused on Enterprise Wide Risk Management Trade Finance Bank in Latin America with 35 years of Remarkable Success Investment Grade Profile with Strong and Unique Shareholding Structure Defined Strategy to Achieve Sustainable Growth Deep knowledge of Latin America with Core in Trade Finance Strategically positioned to capture growth opportunities Compelling Returns sustained by Strong and Reliable Performance Metrics* Diversified Commercial Portfolio with Robust Asset Quality Net Income of $106.9 million as of December 2014 (+26% YoY) Return on Average Equity of 12% Solid 15.6% Tier 1 Capitalization Ratio (Basel III) (*) As of December 2014 Diversified Funding & Conservative Liquidity Management Increased diversification of Regional and Global Funding Sources Advanced Liquidity Management operating under Basel III Framework Sustainable Portfolio Strategy focused on Diversification Strong Asset Quality Management and a Low Risk Core Business Focus 19

20 Regional Presence in Latin America PANAMA HEAD OFFICE Torre V, Business Park Ave. La Rotonda, Costa del Este Apartado Panamá, República de Panamá Tel: (507) ARGENTINA Av. Corrientes 222 P.18º (1043AAP) Capital Federal Buenos Aires, Argentina Tel: (54-11) Contact: Federico Pérez Sartori BRAZIL Rua Leopoldo Couto de Magalhäes Junior 110, 1º andar , Sao Paulo, Brazil Tel: (55-11) Contact: Roberto Kanegae COLOMBIA Calle 113 # 7-45 Edificio Teleport Business Park Torre B, Oficina 1008 Bogotá, Colombia Tel: (57-1) Contact: Camilo Alvarado calvarado@bladex.com MEXICO MEXICO D.F. Rubén Darío 281, piso 15, Oficina #1501 Colonia Bosque de Chapultepec CP , México D.F. Tel: (52-55) Contact: Alejandro Barrientos abarrientos@bladex.com MONTERREY Torre Avalanz, piso 20 oficina 2035 Batallón de San Patricio #109 Col. Valle Oriente, San Pedro, Garza García Nuevo León, C.P , México Tel: (52-81) Contact: Alejandro Barrientos abarrientos@bladex.com PERU Dean Valdivia 243 Piso 7, Oficina 701 San Isidro, Lima Tel: (511) Contact: Victor Mantilla vmantilla@bladex.com UNITED STATES NEW YORK AGENCY 370 Lexington Avenue, Suite 500 New York, NY Tel: (001)

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22 Balance Sheet (In US$ million) Sep-15 Balance Sheet Data: Interest bearing deposits with banks $843 $707 $840 $780 $905 Trading assets 20 5 (0) 0 0 Securities available-for-sale Securities held-to-maturity Investment funds Loans 4,960 5,716 6,148 6,686 6,759 Allowance for loan losses (89) (73) (73) (80) (91) Unearned income and deferred fees (7) (7) (7) (8) (10) Other assets Total Assets $6,360 $6,756 $7,471 $8,025 $7,993 Total deposits $2,304 $2,317 $2,361 $2,507 $3,116 Trading liabilities Securities sold under repurchase agreements and Short-term borrowings 1,700 1,607 2,991 2,993 2,059 Long-term borrowings and debt 1,488 1,906 1,154 1,405 1,790 Derivatives financial instruments - liabilities Other liabilities Total Liabilities 5,595 5,927 6,563 7,114 7,032 Redeemable noncontrolling interest Total Stockholders' Equity Total Liabilities and Stockholders' Equity $6,360 $6,756 $7,471 $8,025 $7,993 22

23 Profit and Loss (In US$ thousand) M15 Profit and Loss: Net interest income $102,710 $104,977 $123,092 $141,131 $107,486 Reversal of provision (provision) for loan losses (8,841) 8,343 1,598 (6,895) (11,103) Net interest income, after reversal of provision (provision) for loan losses 93, , , ,236 96,383 Reversal of provision (provision) for losses on off-balance sheet credit risk 4,448 4,046 (381) (1,627) 4,454 Fees and commissions, net 10,619 10,021 13,669 17,502 12,870 Derivative financial instruments and hedging 2, ,394 Recoveries, net of impairment of assets (57) Net gain (loss) from investment funds 20,314 7,011 (6,702) 3,409 4,766 Net gain (loss) from trading securities (6,494) 11,234 3,221 (393) 893 Net gain on sale of securities available-for-sale 3,413 6,030 1,522 1, Gain on sale of loans 64 1, , Net gain (loss) on foreign currency exchange 4,269 (10,525) (3,834) 766 (1,791) Gain on sale of premises and equipment 0 5, Other income, net 995 1,839 1,644 1,745 1,031 Net other income 40,494 36,500 10,188 25,931 24,700 Total operating expenses (50,087) (55,814) (54,306) (53,702) (38,403) Net income from continuing operations 84,276 94,006 80, ,465 82,680 Net income (loss) from discontinued operations (420) (681) (4) - - Net income 83,856 93,325 80, ,465 82,680 Net income (loss) attributable to the redeemable non-controlling interest (4,185) (475) - Net income attributable to Bladex stockholders $83,180 $93,032 $84,753 $106,940 $82,680 23